EUR/USD has been pushed down by various concerns, but didn’t go too far. What’s next for the common currency? Inflation and current account in the Eurozone as well as some data from Germany are set to rock the euro. Here is an outlook on the highlights of this week and an updated technical analysis for EUR/USD. Bond yields of euro-zone countries, both from the periphery and from the core, have fallen to low levels, doubting the continuation of inflows of yield hungry investments into the euro-zone. In addition, continued verbal pressure from the ECB and the implementation of the negative deposit rate have all weighed on the euro. In the US, the employment situation certainly is encouraging with a big leap in job openings, but the American consumer seems somewhat reluctant to buy. Will the divergence of monetary policy and economic news push the pair even lower? [do action=”autoupdate” tag=”EURUSDUpdate”/]EUR/USD daily chart with support and resistance lines on it. Click to enlarge: Inflation data: Monday, 9:00. According to early CPI data released at the beginning of June, consumer price inflation rose less than expected in May, increasing concerns over the threat of deflation in the region. Consumer price inflation increased by a seasonally adjusted 0.5%, down from 0.7% in April lower than the 0.7% reading predicted by analysts and far below the European Central Bank’s target of near but just under 2%. Meanwhile the Core CPI, excluding food, energy, alcohol, and tobacco posted a seasonally adjusted 0.7% in May, slowing from 1% in April and below expectations for 0.8%. These numbers could be revised to the downside in the final reading for May, justifying the ECB’s decision to act, but at the moment official expectations stand on no-change. Italian Trade Balance: Tuesday, 8:00. Italian trade surplus widened in March to â‚¬3.87 billion, from a â‚¬3 billion surplus in the previous year, Exports increased while imports declined. The 25.7% rise was contrary to market forecasts of â‚¬2.47 billion. Exports increased mainly by higher machinery, equipment and vehicle sales to the United States while imports shrank a non-seasonally adjusted 1.3% year-on-year to â‚¬ 30.43 billion, mainly due to a fall in non-EU purchases. On a seasonally adjusted basis, exports fell 0.8% from February and imports contracted at a faster 1%. A surplus of 4.27 billion is expected. German ZEW Economic Sentiment: Tuesday, 9:00. German analyst and investor sentiment dropped for a fifth consecutive month in May to its lowest level in nearly 1-1/2 years amid concerns of a slowdown in the second quarter. The index declined to 33.1 from 43.2 in April missing predictions for a 41.3 reading. The continues decline in sentiment may suggest a slower growth pace in the coming months following the excellent start of 2014. Arise to 35.2 is predicted. ZEW Economic Sentiment: Tuesday, 9:00. Economic expectations for the Eurozone also lost momentum in May. The index fell by 6.0 points to 55.2. Meanwhile, the indicator for the current economic situation gained 4.9 points to -25.6 points in May. A move higher to 59.6 points is forecast. German PPI: Friday, 6:00. German producer prices improved less than expected in April, down 0.1% from a 0.3% fall in the prior month, mainly due to a sharp decline in energy prices. The reading was below market forecast of a flat reading. Energy prices declined 3% from the year-earlier month. Excluding energy prices, the producer price index was 0.2% lower in April on the year. The low PPI suggests muted price pressures in the whole of the euro zone. A m/m rise of 0.2% is expected. Current Account: Friday, 8:00. The euro zone’s current account surplus contracted unexpectedly in March reaching â‚¬18.8 billion, the lowest level in six months. The current account surplus in March narrowed from â‚¬21.8 billion in February, missing forecasts for a larger surplus of â‚¬23.0 billion. A wider surplus of 19.4 billion is expected. Consumer Confidence: Friday, 14:00. Euro zone consumer confidence improved beyond expectations in May, reaching -7.1 from -8.7 in April, rising to its highest level in six and a half years. Economists expected small rise to -8.2. For the whole of the 28-nation European Union, consumer confidence improved by 1.6 points to -4.1 in May against April, the Commission said. A slight improvement to -6 is expected. * All times are GMT EUR/USD Technical Analysis Euro/dollar began the week with a slide to lower levels, eventually settling below the 1.3550 level (mentioned last week). Live chart of EUR/USD: [do action=”tradingviews” pair=”EURUSD” interval=”60″/]Technical lines from top to bottom: The April peak of 1.3905 serves as minor resistance. It is followed by 1.3865 which capped the pair during the same time as well. 1.3830, which was a long serving 2013 peak comes back into the focus after capping the pair in March 2014 and serving as a clear separator several times. 1.3785 worked as support for the pair during April and served as resistance beforehand. 1.3740, which provided some support at the end of 2013 is now key support to the downside. The round number of 1.37, is another support line after capping the pair in December yet it is weakening. 1.3677 was the peak in June so far, and could turn into important resistance. 1.3650 worked as strong resistance during May and June but is weakening now. 1.3585 served as the bottom of the range and still carries weight despite the breakdown in June. 1.3550 worked as support in January and regains its importance. The round number of 1.35 worked as the last cushion in June and is strong also due to the roundness. 1.3450 worked as resistance in August 2013 and as support in September and October. It is now a key line on the downside. The round number of 1.34 was last seen in December as a stepping stone for the pair on its way down. Broken uptrend support The uptrend support line that accompanies the pair since late February has been broken after a battle. This serves as another downside hint. I turn from neutral to bearish on EUR/USD The ECB wants a weaker euro and is not willing to let go, correcting the error of initially closing the door on even lower rates. With low bond yields and a negative deposit rate, money is likely to slowly leave the euro-zone. Lower inflation numbers could deal yet another blow to the common currency. In the US, recent positive signs point to a slightly more hawkish Fed, and not only the automatic $10 billion taper. All in all, there is now more room to the downside for the pair. More: EURAUD Rally Remains Attractive To Sellers Forex Analysis: EUR/USD Drops to Revisit Four-Month Lows around 1.3500 Support 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 For the kiwi, see the NZDUSD 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 Forecast June 16-20 Yohay Elam 8 years EUR/USD has been pushed down by various concerns, but didn't go too far. What's next for the common currency? Inflation and current account in the Eurozone as well as some data from Germany are set to rock the euro. Here is an outlook on the highlights of this week and an updated technical analysis for EUR/USD. Bond yields of euro-zone countries, both from the periphery and from the core, have fallen to low levels, doubting the continuation of inflows of yield hungry investments into the euro-zone. 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