EUR/USD dropped sharply on the Fed’s hawkish hike, reaching levels last seen around 14 years ago. Will it continue toward parity? A key German survey is the highlight in the week leading to Christmas. Here is an outlook for the highlights of this week and an updated technical analysis for EUR/USD. The Fed raised rates for the second time after the financial crisis and also upgraded its hike forecast for 2017. This ignited a dollar rally that manifested itself in a few waves, ultimately pushing EUR/USD below the 1.0460 level seen in March 2015 and back to levels seen in January 2003. In the euro-zone, data was mixed. The German ZEW measure was left unchanged while German PMIs were mixed and French ones beat expectations. [do action=”autoupdate” tag=”EURUSDUpdate”/]EUR/USD daily graph with support and resistance lines on it. Click to enlarge: German Ifo Business Climate: Monday, 9:00. IFO is Germany’s No. 1 Think-Tank. In its survey for November, the figure stood at 110.4, steady on higher ground. A small rise to 110.7 is on the cards. German PPI: Tuesday, 7:00. The Producer Price Index has been on the rise of late, implying a rise in consumer prices further down the road. After a rise of 0.7%, we could see a more modest advance. An increase of 0.1% is projected. Current Account: Tuesday, 9:00. The euro-zone enjoys a wide trade surplus, mostly thanks to German exports. This reached 25.3 billion back in October and will probably be similar this time: 24.2 billion euros. Belgian NBB Business Climate: Wednesday, 14:00. Despite coming from a small country, this survey serves as a good barometer for the situation in the continent. A score of -1.8 was recorded in November, just under the 0 points threshold separating improving and worsening conditions. A score of -1.1 is predicted. Consumer Confidence: Wednesday, 15:00. This official measure from Eurostat surprised in November, reaching -6 points. This is still in negative territory, reflecting pessimism. A repeat of the same number is expected. German Import Prices: Thursday, 7:00. Prices of imported goods eventually reach consumers. This early indication of inflation trends rose by 0.9% last time. A more modest rise of 0.2% is estimated now. ECB Economic Bulletin: Thursday, 9:00. The European Central Bank publishes the data that the Governing Council reviewed ahead of the recent rate decision. This usually adds some details on why the Frankfurt-based institute decided to extend the QE program. German GfK Consumer Climate: Friday, 7:00. This survey focuses on the consumer. After a few month at double digits, the 200-strong survey slipped under the figure back in October and reached 9.8 points in November. The same score is likely now. French Consumer Spending: Friday, 7:45. The second-largest economy in the eurozone saw its consumers expanding their consumption by 0.9% back in October. A more modest tick up of 0.1% is on the cards. * All times are GMT EUR/USD Technical Analysis Euro/dollar initially held on to 1.0520 and 1.0460 (mentioned last week) before collapsing. Technical lines from top to bottom: We start from lower ground this time. The post-Draghi low 1.0780 replaces 1.08 as support. 1.0710 is the next support line on the chart after temporarily capping the pair in April 2015. 1.0690 is the post-Trump high. 1.0570 is the bottom of the range seen afterward. Further below, the 2016 low of 1.0520 and the 2015 low of 1.0460 provide further support – it is the last line in the sand. Even lower, there are two significant barriers on the way to parity. The 1.0340 level was the low of 2003 before the pair advanced to higher ground. The 101.50 level was a peak seen in 2002, on the first attempt of the pair to break above parity. And then, there is EUR/USD parity. I remain bearish on EUR/USD We may see some initial consolidation after the big downward move. A correction is necessary but does not change the direction. Monetary policy divergence is clearer to see after the ECB’s dovishness, especially as it gobbles up all bonds. In the US, hopes for fiscal stimulus could last at least until Trump’s inauguration. If the pair has a shot on parity, it is between now and the end of January. It might not necessarily happen this week, but the pair could continue falling. Our latest podcast is titled The FED and the Road Ahead Follow us on Sticher or iTunes Safe trading! 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 EUR/USD: Heading For parity; USD/JPY: Targeting 120-125 Range – Yohay Elam 6 years EUR/USD dropped sharply on the Fed's hawkish hike, reaching levels last seen around 14 years ago. Will it continue toward parity? A key German survey is the highlight in the week leading to Christmas. Here is an outlook for the highlights of this week and an updated technical analysis for EUR/USD. The Fed raised rates for the second time after the financial crisis and also upgraded its hike forecast for 2017. 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