Search ForexCrunch
EUR/USD continues to rally and gained over 1.6 percent last week. There are six events in the upcoming week. Here is an outlook at the highlights and an updated technical analysis for EUR/USD.  
Key sectors of the eurozone continue to struggle. French Manufacturing PMI came in at 40.6, while the eurozone, German and Spanish indices were both below the 40-level. The Italian PMI came in at 45.4 points. The services sector is in even worse shape. German, French and eurozone PMIs were slightly over the 30-level, and the Italian and Spanish PMIs were in the high-20s. Eurozone retail sales declined by 11.7 percent for a second straight month, after sliding 11.2% a month earlier. The ECB made no change to key interest rates, but added another EUR 676 billion to the Pandemic Emergency Purchase program. The rescue package now stands at EUR 1.35 trillion.
In the U.S., ISM Manufacturing PMI improved to 43.1, up from 41.1 beforehand. The PMI has indicated contraction for three straight months, as the manufacturing sector has been hit hard by the economic crisis. The services sector also finds itself in contraction territory, as the ISM Non-Manufacturing PMI came in at 45.4 in May within expectations. Nonfarm payrolls shocked with a huge gain of 2.5 million in May, defying the estimate of -7.7 million. In April, the economy shed a staggering 20.5 million jobs. The unemployment rate fell to 13.3%, down from 14.7% beforehand. The forecast stood at 19.4 percent.

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

  1. German Industrial Production: Monday, 6:00. Industrial production sank in March, with a decline of 9.2 percent. This figure was worse than the forecast of 7.3 percent. A much sharper drop is expected in April, with an estimate of -16.0 percent.
  2. Eurozone Sentix Investor Confidence: Monday, 8:30. Investor confidence has evaporated in recent months, with a reading of -42.9 in April and -41.8 in May. The pessimism is expected to ease in June, with a forecast of -22 points.
  3. German Trade Balance: Tuesday, 6:00. German exports have ensured that Germany continues to record trade surpluses. In March, the surplus fell to 12.8 billion euros, short of expectations and its lowest level since 2011. The downtrend is expected to continue in April, with an estimate of 11.9 billion euros.
  4. Eurozone Revised GDP: Tuesday, 9:00. GDP declined by 3.8 percent in Q1, as the eurozone has buckled under the economic meltdown due to Covid-19. The third read is expected to confirm this reading.
  5. French Final CPI: Friday, 6:45. Inflation in the eurozone’s second-largest economy remains low. CPI has posted only one gain in the past four months and came in at a flat 0.0% in May. This figure is expected to be confirmed by the upcoming second reading.
  6. Eurozone Industrial Production: Friday, 9:00. The manufacturing sector has been hit hard by the economic downturn, and industrial production plunged 11.3% in March. Analysts are braced for a huge drop of 20.0% in April.

EUR/USD Technical analysis

Technical lines from top to bottom:

With EUR/USD posting strong gains last week, we start at higher levels:

1.1620 has held in resistance since early October 2019.

1.1515 was a high point at the end of January. 1.1435 was a low point at the beginning of February.

1.1390 was a stepping stone on the way up in late January and capped EUR/USD earlier.

1.1215 has switched to a support role, after holding in resistance since mid-January. 1.1119 is next.

1.1025 (mentioned  last week) has some breathing room after sharp gains by EUR/USD last week.

1.0920 is the final support level for now.


I remain neutral on EUR/USD

The eurozone remains in poor economic shape, but the euro has managed to take advantage of the U.S. dollar, which has shown broad losses in recent weeks. We can expect further volatility from EUR/USD in the coming weeks, as both the U.S. and Europe continue to grapple with economic uncertainty.

Further reading:

Expert score


Etoro - Best For Beginner & Experts

  • 0% Commission and No stamp Duty
  • Regulated by US,UK & International Stock
  • Copy Successfull Traders
Your capital is at risk.