EUR/USD suffered under pressure from the US dollar and as the German elections near. Is this just a correction after reaching new highs? Or has the rally peaked? Inflation data and PMIs stand out now. Here is an outlook for the highlights of this week and an updated technical analysis for EUR/USD. European data continued its upbeat trend, with employment rising by 0.4%, better than expected. However, the recovery of the US dollar great for the euro. A combination of political and geopolitical stability, as well as short-covering all, boosted the greenback. After failing to push down the euro last week, Mario Draghi will sure be smiling now. [do action=”autoupdate” tag=”EURUSDUpdate”/]EUR/USD daily chart with support and resistance lines on it. Click to enlarge: CPI (final): Monday, 9:00. The initial read of inflation for August showed prices rising at a higher level of.5% y/y while core CPI advanced by 1.2%, holding steady. The numbers will likely be confirmed in the final read. Bundesbank Monthly Report: Monday, 10:00. The Bundesbank, Germany’s central bank, publishes a monthly overview of the economy. This will feed into the election campaign. An upbeat assessment will support Chancellor Angela Merkel. Current Account: Tuesday, 8:00. The current account surplus that the euro-zone enjoys can be attributed to German exports. This keeps the euro bid. The surplus reached 21.2 billion in June. We now get the figures for July. A slightly wider surplus of 22.3 billion is predicted. German ZEW Economic Sentiment: Tuesday, 9:00. The early report by ZEW provides a quick insight into the mood in German businesses. In August, the number declined to 10 points, lower than expected. It could rise now thanks to expectations for Merkel to win the elections. A score of 22.3 billion is projected. German PPI: Wednesday, 6:00. Producer prices advanced by 0.2% in July. PPI has fluctuated quite a bit, but generally, provides another view on inflation in the pipeline. A rise of 0.1% is forecast. ECB Economic Bulletin: Thursday, 8:00. This monthly report by the European Central Bank provides insight on how they see the economic situation and price development. It is a more detailed report than the statement released after the rate decision. Consumer Confidence: Thursday, 16:00. This is an official report by the ECB. After a series of improvements, the indicator could not make it to positive ground and still implies a dose of pessimism. It stood at -2 points in the past two months. A repeat of the same score is on the cards. Flash PMIs: Friday: 7:00 for France, 7:30 for Germany and 8:00 for the euro-zone. These forward-looking purchasing managers’ indices by Markit tend to move markets. The French manufacturing PMI stood at 55.8 points in August. A score of 55.6 is expected for September. Services lagged with 54.9 and 54.8 is predicted now. In Germany, manufacturing looks even better with 59.3 and 59 is estimated now. Services are at 53.5 and a small rise to 53.8 is predicted. The euro-zone manufacturing PMI was 57.4 and 57.2 is forecast now. Services stood at 54.7 and 54.8 is estimated. Any score above 50 reflects expansion. Belgian NBB Business Climate: Friday, 13:00. The wide survey from Belgium slipped from -1.5 to -2.1 points, failing to rise above 0. A negative score reflects worsening economic conditions. A similar score of -2 is projected now. * All times are GMT EUR/USD Technical Analysis Euro/dollar was unable to hold the higher ground above 1.20 and dropped to support at 1.1870, mentioned last week. Technical lines from top to bottom: 1.2565 capped the pair back in late 2014. It is followed by 1.2240, another line from that time and 1.2170, quite close by. 1.2040 was the low point in 2012 and close to the round number of 1.20. It is followed by 1.1870, the trough in 2010, also seen in early August 2017. 1.17 is a round number that served as a cushion for the pair during the month of August. It replaces the 2015 high of 1.1712. 1.1620 was a swing high in May 2016. 1.1580 was a stepping stone for the pair on the way up in July 2017. It is followed by the round number of 1.15. 1.1445 is the June 2017 peak and immediate resistance. 1.1390 is the post-breakout low and works as support. 1.13 is the top line seen in November before the collapse. 1.1230 capped the pair in June. I am neutral on EUR/USD While the economic situation in Europe continues looking good, things in the US have improved as well: this includes a better political environment, hopes for a tax reform and renewed optimism about a rate hike from the Fed. After the pair corrected, it could trade around the same levels before resuming the uptrend. Our latest podcast is titled Everything you need to know for September Follow us on Sticher or iTunes Further reading: GBP/USD forecast – Pound/dollar predictions USD/JPY forecast – analysis for dollar/yen AUD/USD forecast – the outlook for the Aussie dollar. USD/CAD forecast – Canadian dollar predictions Forex weekly forecast – Outlook for the major events of the week. 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 GBP: 3 Reasons For Downside Risks But Won’t Fight Yohay Elam 5 years EUR/USD suffered under pressure from the US dollar and as the German elections near. Is this just a correction after reaching new highs? Or has the rally peaked? Inflation data and PMIs stand out now. Here is an outlook for the highlights of this week and an updated technical analysis for EUR/USD. European data continued its upbeat trend, with employment rising by 0.4%, better than expected. However, the recovery of the US dollar great for the euro. A combination of political and geopolitical stability, as well as short-covering all, boosted the greenback. 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