EUR/USD had a positive week, breaking long term resistance. Will it continue marching forward? German ZEW Economic Sentiment and GDP releases are the main events on our calendar. Here is an outlook for the main events of the week and an updated technical analysis for EUR/USD. Strong data was released for the Eurozone’s locomotive, Germany; trade surplus topped market expectations industrial output soared 2.4%. The GDP expectations are now very high. Will Germany keep the euro on high ground? In the US, positive signs and taper talk hardly stopped the fall of the dollar.Let’s Start [do action=”autoupdate” tag=”EURUSDUpdate”/]EUR/USD daily chart with support and resistance lines on it. Click to enlarge: German Final CPI: Tuesday, 6:00. German consumer prices advanced 0.1% in June, confirming the preliminary estimate. The reading was preceded by a 0.4% increase in May. Annual inflation increased from 1.5% in May to 1.8% in June. The Bundesbank expects inflation to reach 1.6% in 2013, before declining to 1.5% in 2014. A further climb of 0.5% is anticipated now. German WPI: Tuesday, 6:00. German wholesale price index dropped more-than-expected on June falling 0.4% after the same drop in the preceding month. The reading missed predictions for a 0.3% rise. An increase of 0.3% is expected. German ZEW Economic Sentiment: Tuesday, 9:00. The German economic sentiment released by ZEW revealed caution in July, with a decline to 36.3 from 38.5 in the previous month. Economists expected a rise to 39.8. Investors became more concerned with Germany’s faltering economic growth. German economic sentiment is predicted to reach 40.3. Industrial Production: Tuesday, 9:00. Euro zone industrial output declined in May after four months of gains, down 0.3% after a 0.5% increase in April. This decline was worse than the 0.2 drop projected by analysts, suggesting the Eurozone’s recovery is fragile. The ECB implied it would keep rates at a minimum low to help the recovery process pick-up pace. A gain of 1.1% is forecasted now. ZEW Economic Sentiment: Tuesday, 9:00. German Centre for European Economic Research (ZEW) showed that economic sentiment in the euro-zone edged up unexpectedly to 32.8 in July from 30.6 in June, despite a drop in German economic sentiment. ZEW President Clemens Foster said investors have positive expectations and believe Germany will withhold weaker industrial production and foreign trade data. Another rise to 37.4 is projected now. French Prelim GDP: Wednesday, 5:30. France economy shrank in the first quarter by 0.2%, hit by recession after another fall of 0.2% in the final quarter of 2012. French economy has not showed any significant progress over the year and a recent poll showed that President Francois Hollande’s approval rating has plunged dramatically to 25%. Unemployment remained high and growth continues to slow. The euro-zone’s No. 2 economy is expected to expand by 0.1% this time. German Prelim GDP: Wednesday, 6:00. German GDP demonstrated a hesitant growth in the first quarter, rising by a mere 0.1%, lower than the 0.3% growth rate estimated by analysts. The slow growth was preceded by a 0.7% contraction in the last quarter of 2012, indicating Europe’s largest economy not immune to the euro crisis. German economy is expected to grow 0.6%. French Prelim Non-Farm Payrolls: Wednesday, 6:45. French non-farm payrolls fell less than expected in the first quarter, dropping 0.1% after a 0.3% decline in the final quarter of 2012. Unemployment in France reached 10.2% last year, rising from 9.6% in 2011, Eurostat predicts Jobless rate would pick up to 10.6% this year and rise to 10.9% in 2014. No change is expected in the number of jobs this time. Flash GDP: Wednesday, 9:00. Gross domestic product in the 17-nation euro area declined 0.2% in the first quarter, mainly due to the ongoing recession in France. The Eurozone grown was in contraction since the third quarter of 2011, the longest period of declining output in the eurozone’s history. Germany, which accounts for about 30% of eurozone output, expanded by a mere 0.1% in the quarter, French output fall by 0.2% for a second consecutive quarter adding concerns the Euro area is still in recession. The Eurozone is expected to advance 0.2%. Current Account: Friday, 8:00. The eurozone’s current account surplus narrowed to 19.6 billion euros in May from 23.8 billion euros in April. Analysts expected a smaller drop to 21.3 billion euros. Over the 12 months to May, the current account showed a surplus of 189.5 billion euros, compared with a surplus of 53.3 billion euros a year earlier. Surplus is expected to grow to 21.2 billion euros. Inflation data: Friday, 9:00. Euro-zone annual inflation increased to 1.6% in June, up from 1.4% in May, and in line with market expectations. The rise was largely due to an increase in food and electricity prices. Meanwhile Core inflation, excluding food, energy, alcohol, and tobacco, remained unchanged at 1.2%, as forecasted. CPI is expected to remain 1.6% while core CPI is expected to decline to 1.1% *All times are GMT EUR/USD Technical Analysis Euro/dollar started the week capped under the 1.33 line (discussed last week). It took a bitter struggle, but the pair eventually moved higher and continued to top the 1.3350 level, but all came at a gradual pace. 1.34 eventually capped the pair, and the pair began descending. Technical lines from top to bottom: We start from higher ground this week. 1.37 was the 2013 peak, and is still far. 1.3590 capped EUR/USD back in February and is minor resistance. 1.3520 was a swing high in February, before the pair tumbled down. 1.3480 was part of a head and shoulders pattern seen in January and February. 1.3415 was the peak back in June and serves as a strong line of resistance. Beyond this line, it’s a 6 month high. 1.3350 provided support when the pair traded higher in February and weakens now. 1.33 capped the pair quite strongly during July and August 2013. 1.3255 provided support during January 2013 and also beforehand. The line remains strong. 1.3175 capped the pair during July 2013 and works as another line of defense for any moves to the downside. It proved its strength during July 2013 . 1.3100 is worked as temporary resistance in December 2012 and is becoming more important once again, after capping a recovery attempt in June and then in July. It is followed by 1.3050, which proved be strong support in May 2013, defending the round number in more than one occasion, but it is less significant now. The very round 1.30 line was a tough line of resistance. In addition to being a round number, it also served as strong support and recently worked as a pivot line. 1.2940 is the next line of support. It worked as such during April and May 2013. Lower, 1.2890 worked in both directions during 2012 and was the beginning of the uptrend support line. It is becoming more important, as a clear separator of ranges. 1.2840 worked as a cushion for the pair during May 2013. Long term downtrend resistance broken for real After an initial false break the downtrend resistance line dropping from the February high of 1.37 through the June high of 1.3415 was finally broken, and the pair continue advancing. Uptrend resistance Since early July, EUR/USD is running along an uptrend resistance line, and now got a bit far from it. I am neutral on EUR/USD We are seeing positive signs on both sides of the Atlantic: Germany’s economy is on the march and Italy is contracting less than expected. In the US, both job openings and the 4 week moving average of jobless claims are at levels last seen many years ago and tapering is closer than it seems. However, the optimistic summer markets weigh on the dollar and limit gains for the dollar, especially after this trendline has been broken. Strong German GDP can push the euro higher. More on EUR/USD: EUR/USD Advances to Major 1.3400 Resistance – by James Chen Weaker jobs number is not end of USD rally – by Justin Pugsley If you are interested a different way of trading currencies, check out the weekly binary options setups, including EUR/USD and more. Further reading: For a broad view of all the week’s major events worldwide, read the USD outlook. For the Japanese yen, read the USD/JPY forecast. For GBP/USD (cable), look into the British Pound forecast. For the Australian dollar (Aussie), check out the AUD to USD forecast. USD/CAD (loonie), check out the Canadian dollar forecast Yohay Elam Yohay Elam Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts. Yohay's Google Profile View All Post By Yohay Elam EUR/USD ForecastMajors share Read Next USD/JPY Outlook August 12-16 Kenny Fisher 9 years EUR/USD had a positive week, breaking long term resistance. Will it continue marching forward? German ZEW Economic Sentiment and GDP releases are the main events on our calendar. Here is an outlook for the main events of the week and an updated technical analysis for EUR/USD. Strong data was released for the Eurozone's locomotive, Germany; trade surplus topped market expectations industrial output soared 2.4%. The GDP expectations are now very high. Will Germany keep the euro on high ground? 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