EUR/USD traded at high ground during most of the week, and then fell back down. This week features initial GDP figures and many more figures that will influence the Euro. Here’s a technical analysis for EUR/USD and an outlook on this week’s key events. EUR/USD forex chart, with important support / resistance line marked: I don’t usually cover EUR/USD, the most popular currency pair in forex trading. The narrow trading ranges made me look away. This week’s events, with deflationary CPI, the monthly ECB bulletin and of course the GDP, make it quite interesting. Here’s what’s expecting us in Europe: French Industrial Production: Though being a figure for the second largest economy in Europe, the timing here makes it important: Monday at 6:45 GMT. Being the first European indicator this week, it’ll have impact. After a huge surprise last time, a rise of 2.6%, French Industrial Production is predicted to get back to normal and fall by 0.1%. A surprise will help EUR/USD. Industrial Production: The all-European industrial production figure is expected to rise by 0.4%, slightly less than last month’s rise of 0.5%. In previous months, this figure dropped over and over again. This month’s release will determine if the improvement last month wasn’t a one-time event. Published on Wednesday at 9:00 GMT. German Prelim GDP: Europe’s biggest economy, and the 4th largest in the world, is also the first to publish the GDP for the first quarter. This preliminary figure is expected to show a significant improvement comparing to first quarter’s contraction of 3.8%. Yet, trouble isn’t over, at least not according to the predictions. The German economy is expected to squeeze by 0.3% in the second quarter of 2009. It’s published on Thursday at 6:00 GMT. French Prelim GDP is published 45 minutes later, and has a smaller impact. It’s also predicted to show a smaller contraction: from 1.2% to 0.5%. ECB Monthly Bulletin: A week after the rate decision, the monthly bulletin exposes the data that Jean-Claude Trichet and his ECB fellows saw before making their last decision. We’ll get to see the current economic conditions and the future prospects as seen by the senior bankers. It’s published on Thursday at 8:00 GMT. Flash GDP: On one hand, it’s published after the continent’s two largest economies already released their GDP. On the other hand, Germany and France don’t reflect the state of all Euro zone members. The initial reading is expected to show a contraction of 0.5%, better than 2.5% last time. Still, this will probably be the fifth consecutive quarter of contraction in the old continent. Published on Thursday at 9:00 GMT. CPI: Europe suffers from deflation, maybe the worst in the world. Consumer Price Index is expected to show a continuing fall in prices. Annually adjusted CPI is predicted to fall by 0.6%. Core CPI is predicted to be somewhat less pale, and rise by 1.4%. This is the last figure for the week, released on Friday at 9:00 GMT. EUR/USD Technical Analysis The Euro began the week with a quick leap from 1.4287 to the levels above 1.44, reaching 1.4447 at the peak. The dollar began recovering on Thursday, but the Euro still stood strong. The collapse came only on Friday, but it was colossal – EUR/USD ended the week at 1.4181, below its previous levels. From this point the Euro can continue retreating towards 1.40, a very round number that served as a support line not long ago. Below that, the area of 1.3850 also served as a strong support in a few months ago. Looking upwards, 1.4450, this week’s repeated peak, is now a resistance line. Beyond that line, only 1.49 is a significant resistance line, that EUR/USD is unlikely to encounter this week. It seems that only growth in Germany can trigger new hopes and renewed gains. Otherwise, the recovering dollar will be another weight on the sick European economy. Further reading: For a broad view on the week’s major events, read the Forex Weekly Outlook. For USD/CAD, check out the Canadian Dollar Outlook. For the British Pound, here’s the GBP/USD Outlook. For the Aussie, see the AUD/USD Outlook. 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 Forecast share Read Next Forex Daily Outlook – August 10th 2009 Yohay Elam 13 years EUR/USD traded at high ground during most of the week, and then fell back down. This week features initial GDP figures and many more figures that will influence the Euro. Here's a technical analysis for EUR/USD and an outlook on this week's key events. EUR/USD forex chart, with important support / resistance line marked: I don't usually cover EUR/USD, the most popular currency pair in forex trading. The narrow trading ranges made me look away. This week's events, with deflationary CPI, the monthly ECB bulletin and of course the GDP, make it quite interesting. 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