Euro/dollar managed to edge up in another choppy week. The new month features a rate decision by the ECB among other events. Will the euro continue advancing slowly? Here is an outlook for the upcoming events and an updated technical analysis for EUR/USD. Greece returned to the spotlight with more talk that another restructuring is on the way. Bigger trouble can come from Spain, which is struggling with a fierce recession. In the US, cautious optimism remains the main theme of the recovery, which is “blamed” for good weather. Updates: German Retail Sales dropped 1.1%, confounding the markets, which had forecast a 1.3% increase. French Consumer Spending shot up by 3%, its best reading in over five years. CPI came in at 2.6%, very close to the market prediction. Italian Prelim CPI rose 0.5%. Final Manufacturing PMI dropped to 47.7, a three-month low. Eurozone Unemployment rate nudged up to 10.8%, matching the market forecast. EUR/USD has dropped sharply, trading at 1.3164. The plunge was triggered by the release of the March FOMC Meeting Minutes, which indicated that the Fed intends to refrain from further quantitative easing unless the rate of growth falters or inflation drops below the central bank’s 2% targeted rate. Final Services PMI posted a reading of 49.2, slightly above the market forecast. Retail Sales disappointed, dropping by 0.1%. The markets had forecast a very slight increase of 0.1%. German Factory Orders also fell below the market forecast, recording a modest rise of 0.3%. The market prediction called for a 1.2% rise. A expected, the ECB maintained its key interest rate at 1%. German Industrial Production was well below the market forecast, falling by 1.3%. Spain’s borrowing costs continued to rise following a weak response to the government’s bond auction. EUR/USD continues to drop, falling below the 1.31 level and trading at 1.3073. EUR/USD daily graph with support and resistance lines on it. Click to enlarge: Final Manufacturing PMI:: Monday, 8:00. The euro-zone’s manufacturing sector has been contracting in the past 8 months according to the purchase managers’ index. The initial score of 47.7 points (under 50) will likely be confirmed now. It was lower than the previous month’s 49 points. Unemployment Rate: Monday, 9:00. The average unemployment rate in the euro-zone recently lifted its head and rose to 10.7%. The same rate will likely prevail for another month. In Spain, the unemployment rate is above 23%. Final GDP: Tuesday, 9:00. According to the first release for Q4, the euro-zone’s economies contracted by 0.3%. A confirmation will likely be seen. Also Q1 doesn’t look good. Final Services PMI: Wednesday, 8:00. The services sector is doing a bit better than the manufacturing one. It stood in growth zone two months ago before returning to contraction. The score of 48.7 points will probably be confirmed now. Note that revisions were seen in the past to this indicator. Retail Sales: Wednesday, 9:00. Small changes were seen to the volume of retail sales lately. A rise of 0.3% followed a drop of 0.5% beforehand. And now, a small rise of 0.2% is predicted. It could be worse though, as Germany’s retail sales were quite disappointing. German Factory Orders: Wednesday, 10:00. Europe’s No. 1 economy saw big changes in the levels of orders in factories. After a drop of 2.7%, a rise of 1.4% is predicted now. Rate decision: Wednesday, 11:45, Press conference at 12:30. Mario Draghi is so pleased from the LTROs he initiated, that he’ll probably wait for another month before considering another policy move. The European economies are suffering from a recession that could be deep, but prices are rising in Germany, and this will prevent any rate cuts. In addition, the rate is at the lowest historic level and inflation is above target. Draghi warned about inflation. Without another extraordinary event, the German members will likely prevent a cut. German Industrial Production: Thursday, 10:00. Contrary to factory orders, the level of industrial output rose nicely last month: 1.6%. A correction is predicted now, with a small drop of 0.2%. French Trade Balance: Friday, 6:45. The euro-zone’s second largest economy saw a trade deficit of 5.3 billion euros last month. A similar deficit of 5.1 is predicted now. * All times are GMT EUR/USD Technical Analysis Euro/$ started the week by ticking up, crossing the 1.3280 line (discussed last week). It then chopped around these levels throughout the week. Technical lines from top to bottom: 1.3615 switched from support in October to support in November and is now resistance and remains far. 1.3550 capped the pair in November and December and marked the beginning of the plunge. 1.3486 was a distinctive double top in February 2012 and is a strong cap. It’s closely followed by minor resistance at 1.3437. The pair struggled there. 1.3360 provided some support in February 2012, when the pair was trading on high ground, and is now weak resistance. Quite close by, 1.33 was tough resistance 4-5 times, with two attempts very recently. It remains key resistance. 1.3212 held the pair from falling and switched to resistance later on. It now returns to support but isn’t that strong. This was the bottom border of tight range trading in February. 1.3135 provided support for the pair in late March 2012 and is now key support for the recent range trading. 1.3080 provided some support in March 2012 and also had a role in early 2011. The round number of 1.30 is psychologically important and is now stronger than earlier. It managed to keep the pair from falling. The 1.2945 line is stronger once again and still provides support. 1.2873 is the previous 2011 low set in January, and it returns to support once again. This is a very strong line separating ranges. 1.2760 is a pivotal line in the middle of a recent range. It provided support early in the year. 1.2660 was a double bottom during January and the move below this line is not confirmed yet. 1.2623 is the current 2012 low, but only has a minor role now. The reaction in markets to the strong jobs report resembles a similar move in December 2009, and could point to an avalanche in EUR/USD. See the charts here. I am neutral on EUR/USD The level of uncertainty rose concerning the both the debt crisis and the pace of the US recovery. More information about Spain and the situation of the euro-zone as a whole will be provided from the ECB. The Non-Farm Payrolls and the preceding data will provide an updated picture on the most important US fundamentals, which have seen some doubts. All in all, the long term picture remains bearish: Europe is already in a recession and the US is still growing. Nevertheless, things can change to both directions. If you have interest in a different way of trading currencies, check out the weekly binary options setups, including EUR/USD, GBP/JPY 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. For the New Zealand dollar (kiwi), read the NZD forecast. For the Swiss Franc, see the USD/CHF 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 AUD/USD Outlook April 2-6 Kenny Fisher 10 years Euro/dollar managed to edge up in another choppy week. The new month features a rate decision by the ECB among other events. Will the euro continue advancing slowly? Here is an outlook for the upcoming events and an updated technical analysis for EUR/USD. Greece returned to the spotlight with more talk that another restructuring is on the way. Bigger trouble can come from Spain, which is struggling with a fierce recession. In the US, cautious optimism remains the main theme of the recovery, which is "blamed" for good weather. 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