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EUR/USD gained over 1% last week, its strongest gains since early June. There are five events in the upcoming week, including eurozone and German inflation.  Here is an outlook at the highlights and an updated technical analysis for EUR/USD.  
In Germany, CPI rebounded to 0.6% in June, after a decline of 0.1% a month earlier. German ZEW Economic Sentiment slipped to 59.3, down from 63.4 beforehand. The ECB maintained rate policy, holding the main financing rate at 0.00%. ECB President Christine Lagarde tried to send a reassuring note, saying that the Q2 decline was broadly in line with the forecast. She also said that the economic recovery had slowly begun.
Eurozone industrial production climbed 12.4%, after back-to-back declines in double digits. On the inflation front, eurozone CPI rose from 0.1% to 0.3%, but the core read dipped to 0.8%, down from 0.9%. Both indicators matched the forecasts.
In the US, industrial production jumped 5.4% in June, its largest monthly gain since 1959. Retail sales rose by 7.5%, while the core reading climbed by 7.3%. Both indicators beat the forecast of 5.0%. New unemployment claims dipped slightly to 1.3 million, but the total number of claims is above 32 million, as the employment situation remains grim. Finally, consumer confidence became more pessimistic, as UoM Consumer Sentiment fell to 73.2 in July, down from 78.9 beforehand.

EUR/USD daily chart with support and resistance lines on it. Click to enlarge:

  1. German Current Account: Monday, 8:00. Germany’s current account surplus fell to EUR14.4 billion in April, down sharply from the previous reading of EUR27.4 billion. The estimate for May stands at EUR15.2 billion.
  2.  German GfK Consumer Climate: Thursday, 6:00. This consumer confidence survey continues to point to pessimism among German consumers. Still, the level of pessimism has been easing. The indicator improved from -18.9 to -9.6 in June and the estimate for July stands at -4.8.
  3. Eurozone Consumer Confidence: Thursday, 14:00. Like in Germany, consumer confidence has been improving, but remains in negative territory. The indicator came in at -15 in May, up from -19 beforehand. The estimate for June stands at -12.
  4. PMIs: Friday, 7:15 in France, 7:30 in Germany, and 8:00 for the whole eurozone. In Germany and the eurozone, manufacturing PMIs rose sharply in May, but remain in contraction territory. The German PMI rose from 36.6 to 45.2, while the eurozone indicator climbed from 39.4 to 47.4. French Manufacturing PMI improved to 52.3, which indicates expansion. In Germany and the eurozone initial readings for July are projected to improve but remain in contraction territory, with estimates of 48.0 and 49.6, respectively. In the services sector, German PMI is expected to rise to 50.1 just above the 50.0 threshold, which separates contraction from expansion. The eurozone index is expected to improve to 51.0 and the French indicator to 52.3.

EUR/USD Technical analysis

Technical lines from top to bottom:

We start with resistance at 1.1725. 1.1573 is next.

1.1470 was a low point at the beginning of February.

1.1328 remains relevant. Currently, it is an immediate support line.

1.1215 is the first line of support.

1.1119 (mentioned  last week) is the final support line for now.


I am bullish on EUR/USD

The euro continues to gain ground and is up 1.7% in July. The pair closed the week above 1.14 for the first time since January, as the US dollar continues to struggle.

Further reading:

Safe trading!