EUR/USD Weekly Forecast: Bears Targeting Parity Level as USD Regains
EUR/USD Forecast

EUR/USD Weekly Forecast: Bears Targeting Parity Level as USD Regains

  • Market participants applaud lowering inflationary pressures in the US.
  • Investors expect Eurozone core inflation to rise.
  • In the charts, the price is experiencing trendline resistance.

The weekly EUR/USD forecast is slightly bearish as the Eurozone economic outlook remains bleak. This past week, the EUR/USD pair moved upward and soared to 1.0368, its highest level in more than a month. Later, it dropped to close the week at around 1.0260.

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Ups and downs of EUR/USD

US inflation data supported the rise in high-yielding assets. According to official data, the Consumer Price Index increased by 8.5% YoY in July, which is less than was predicted. Similar results were reported by the Producer Price Index, which accelerated by 9.8% YoY in the same month.

The figures fell short of both market estimates and the final June measurements. The US pricing pressures have eased, allowing the Federal Reserve to slow down the tightening rate and prevent a more severe economic downturn in the nation. Speculative interest applauded this development.

The US indices hit new two-month highs, and stock markets rose, strengthening the EUR/USD. The gains in US government bond yields stopped the rallies from continuing, which allowed the dollar to strengthen before the weekly close.

Next week’s key events for EUR/USD

EUR/USD weekly forecast

There will be a few notable events next week, but the focus will primarily be on possible recession threats. The US will report July Retail Sales, which are expected to increase by a moderate 0.1%, while the EU will issue the second estimate of its Q2 Gross Domestic Product and the final estimate of its July CPI. The minutes of the US Federal Reserve’s most recent monetary policy meeting will finally be made public.

EUR/USD weekly technical forecast: Trendline and critical level resistance at 1.03500

EUR/USD weekly forecast

Looking at the daily chart, we see the price trading above the 22-SMA showing an uptrend. However, this uptrend has come up against a strong resistance level with a descending trendline and the 1.03500 critical level. This trendline has acted as resistance on many occasions and might do so again.

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The RSI is trading slightly above 50, showing that bullish momentum is still there.

The price is trading close to the 22-SMA and has attempted to break below. A successful break below the SMA would confirm the start of a downtrend that would retest support at parity.

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Saqib Iqbal

Saqib Iqbal

Saqib Iqbal is a market analyst, prop fund trader and mentor, serving the industry with his analysis and educational content since 2011. The author has great exposure to different financial markets and institutions. He's well-known for his day trading reviews and multiple timeframe analysis.