EUR/USD Forecast May 20-24 – Euro loses ground; will trade tensions continue the downturn?
EUR/USD Forecast, Majors, Weekly Forex Forecasts

EUR/USD Forecast May 20-24 – Euro loses ground; will trade tensions continue the downturn?

EUR/USD posted losses last week, erasing the gains seen in the previous two weeks. This week’s highlight is services and manufacturing PMIs for April. Here is an outlook for upcoming events and an updated technical analysis for EUR/USD.

Eurozone consumer inflation indicators impressed, with sharp gains in April. Final CPI climbed 1.7%, matching the forecast. This was up sharply from 0.8% in March. Final Core CPI rose 1.3%, edging above the estimate of 1.2%. This marked the strongest gain since March 2013. In Germany, Preliminary GDP gained 0.4%, in Q1, its strongest reading in three quarters.

The eurozone economy has been struggling, and even the German locomotive has shown signs of weakness. The manufacturing sectors have been hit particularly hard, as the global trade war has dampened the appetite for German and European exports. The U.S. and China have been holding talks to diffuse trade tensions, but President Trump slapped new tariffs on Chinese products and China quickly responded with counter-tariffs. Investors are worried if the trade war escalates, Trump could target European cars made in China, which would hurt the massive German auto sector. On Wednesday, the U.S. announced a 6-month moratorium on tariffs on European and Japanese vehicles, but investors will likely remain nervous that the U.S. could impose further trade sanctions against China.

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


  1. German PPI: Tuesday, 6:00. The Producer Price Index has sagged, posting two successive declines of 0.1%. Better news is expected from the April release, with an estimate of 0.4%.
  2. Current Account: Monday, 8:00. The current account surplus narrowed to EUR 26.8 billion in February, shy of the estimate of EUR 33.2 billion. The downward trend is expected to continue in March, with an estimate of EUR 24.2 billion.
  3. Consumer Confidence: Tuesday, 14:00. Eurozone consumers remain pessimistic about the economic outlook. Consumer confidence dropped to -8 in April and no change is expected in the May release.
  4. German Final GDP: Thursday, 6:00. Final GDP is expected to post a gain of 0.4%, unchanged after the initial release earlier this month.
  5. PMIs: Thursday, 7:15 for France, 7:30 for Germany, and 8:00 for the euro-zone. French services PMI came in at 50.5 in April, indicating stagnation. The estimate for May is 50.7. The estimate for manufacturing PMI is 50.1, after two straight readings below 50, which indicates contraction. German services PMI has been pointing to expansion, and another solid release is expected, with an estimate of 55.2. Manufacturing has been weaker, and another decline is forecast, with an estimate of 45.9. The trend in the eurozone is similar, with contraction expected for the manufacturing PMI (48.2), while services PMI is forecast to point to expansion (53.0).
  6. German Ifo Business Climate: Thursday, 8:00. Business confidence remains strong, although the April reading of 99.2 fell short of the estimate of 99.7.   No change is expected in the May release.
  7. ECB Monetary Policy Meeting Accounts: Thursday, 11:30. The minutes provide a detailed look at the views of rate-setters at the most recent policy meeting in April. At the meeting, members said that the ECB would not raise rates before the spring of 2020, at the earliest. Investors will be looking for more clues about the timing of a rate move.

* All times are GMT

EUR/USD Technical analysis

Technical lines from top to bottom:

1.1570 has held in resistance since mid-October.

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. This is followed by 1.1345.

1.1290 is the next resistance line. Close by, 1.1270 was a double-bottom in December 2018.

1.1215 remained relevant. It starts the week as a weak support line.

1.1119 (mentioned last week)  is the next support level.

1.1025 was a cap back in May 2017.

1.0950 is the next support level.

1.0870 was a swing high in December 2017.

1.0820 is the final support line for now.

I am neutral on EUR/USD

The euro has shown little reaction to rising trade tensions, so investors can expect the pair’s movement to be largely dependent on this week’s fundamental data out of the eurozone and the U.S.

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Kenny Fisher

Kenny Fisher

Kenny Fisher - Senior Writer A native of Toronto, Canada, Kenneth worked for seven years in the marketing and trading departments at Bendix, a foreign exchange company in Toronto. Kenneth is also a lawyer, and has extensive experience as an editor and writer.