- The Fed unanimously decided to keep interest rates unchanged at the last meeting.
- The US released a mixed employment report.
- Although the US added fewer jobs than expected, the unemployment rate fell.
The EUR/USD weekly outlook is bullish as the US labor market has shown signs of easing. Therefore, the dollar might continue its decline next week.
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Ups and downs of EUR/USD
The EUR/USD had a bullish week, with the euro strengthening against the dollar. On Wednesday, the US released the FOMC meeting minutes.
In their June meeting, the Fed unanimously decided to keep interest rates unchanged. This decision allows the Fed to evaluate the need for future rate hikes. While most members anticipated the need for policy tightening, they opted to maintain the current rates.
However, the EUR/USD posted its largest gains on Friday when the US released a mixed employment report. Although the US added fewer jobs than expected, the unemployment rate fell. Still, the dollar weakened in response to the report.
Next week’s key events for EUR/USD
Investors are awaiting the US inflation report coming out next week. This report carries a lot of weight as it will influence the Fed’s next policy move. Notably, the Fed maintained its policy rate between 5%-5.25% last month.
Furthermore, despite a robust labor market, it indicated future rate hikes due to persistently high inflation levels and a sluggish pace toward the Fed’s 2% target.
Investors will also focus on the ECB policy meeting minutes that will show what went into the last ECB rate hike. Additionally, it might give clues on the next step for the European Central Bank.
EUR/USD weekly technical outlook: Bulls to retest the 1.1001 and 1.1100 resistance levels.
The bias for EUR/USD on the daily chart is bullish because the price is bouncing higher after finding support at the 30-SMA. At the same time, the RSI has risen from the pivotal 50-level, showing strong bullish momentum.
Bulls are now approaching the 1.1001 resistance level. Since the bullish bias is strong, there is a good chance the price will seek a higher high next week. This would mean a break above the 1.1001 resistance level and a retest of the 1.1100 resistance.
Moreover, a higher high would strengthen the bullish bias and could begin a bullish trend.
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Saqib Iqbal
