Growth in the continent’s largest economies didn’t help the Euro to make serious gains. It’s still trading in uptrend channels, but these are narrowing. 5 important events will determine EUR/USD’s direction this week. Here’s an outlook on the key events and a technical analysis for EUR/USD. EUR/USD Graph – with the uptrend channels highlighted: EUR/USD, the world’s most popular pair, enjoyed a surprising figure – Germany and France posted growth in the second quarter, earlier than expected. This week’s PMI figures, German ZEW Economic Sentiment and three more releases will set the direction for EUR/USD. Let’s see what’s awaiting us this week: Trade Balance: The first European release for this week is predicted to be positive – the surplus in the Euro zone’s trade balance is expected to rise from 0.8 billion to 1.4 billion. The German and French trade balance figures have already been released, but they don’t necessarily reflect the whole continent’s situation. Published on Monday at 9:00 GMT. ZEW Economic Sentiment: The German institute called Zentrum fur Europaische Wirtschaftsforschung publishes this highly regarded economic indicator which surveys the top investors and analysts. The German ZEW figure is very important for EUR/USD. After disappointing and scoring 39.5 last month, it’s predicted to bounce back to 45.2 this time. The all-European number is published at the same time, and it’s also expected to bounce up to 44.6 from the same 39.5. German PPI: Europe’s largest economy releases its Producer Price Index on Wednesday at 6:00 GMT. The Euro-zone suffers from deflation, and this will probably continue. German PPI is predicted to fall by 0.1%, exactly like last month. It won’t help Trichet lift the interest rate… Current Account: Europe’s deficit has been falling for 4 months in a row, following the peak deficit reported in March. After last month’s surprisingly low deficit of 1.2 billion, it’s expected to grow again to 1.7 billion. Published on Wednesday at 8:00 GMT. PMI: European Purchasing Managers’ Indices are spread over a full hour on Friday morning. All the figures are expected to continue rising very slowly, but none are expected to breach the pivotal 50 point mark, which is the border between contraction and expansion. French Flash Manufacturing PMI is expected to rise from 48.1 to 49.1, and French Flash Services PMI is predicted to rise from 45.5 to 46.6 points. France releases the number at 7:00 GMT. Half an hour later (7:30 GMT), it’s Germany’s turn: Flash Manufacturing PMI is expected to rise from 45.7 to 47.1 while Flash Services PMI is expected to edge up from 48.1 to 48.8. Last but not least, the all-European figures are released half an hour later, at 8:00 GMT. Flash Manufacturing PMI is expected to rise from 46.3 to 47.8, and Flash Services PMI from 45.7 to 46.6. EUR/USD Technical Analysis The Euro was trading in a narrow and low range until Thursday morning, when German and French Prelim GDP showed growth instead of contraction – the Euro traded above 1.43, but didn’t hold these gains – it closed the week at 1.42. Contrary to last week’s EUR/USD technical analysis, I’m now viewing the EUR/USD from a different angle -looking at the uptrend channels. EUR/USD is capped by an uptrend resistance line that began with a peak in May and continues with a recent peak two weeks ago. Below, there are two uptrend support lines – the sharper one begins with a bottom in April and continues with a recent bottom. The other, milder uptrend support line begins in May and has three bottoms to support it along the way, making it stronger. Anyway, both uptrend support lines create a narrowing channel with the resistance line. The lines aren’t parallel. The trend is upwards, but the narrowing channel suggests that it will soon be broken. Since both Europe (with the surprising growth), and the US (with the surprising drop in the unemployment rate) are showing big signs of recovery, it’s very hard to tell were EUR/USD is going. Do you have a sentiment regarding EUR/USD? I’m dollar-bullish on other currency pairs… Further reading: For a broad view of the major events in all currencies: Forex Weekly Outlook. For a coverage of GBP/USD, read the British Pound Outlook. For the Canadian dollar, check out the USD/CAD Outlook. For AUD/USD, check out the Aussie 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 AUD/USD Outlook – August 17-21 2009 Yohay Elam 13 years Growth in the continent's largest economies didn't help the Euro to make serious gains. It's still trading in uptrend channels, but these are narrowing. 5 important events will determine EUR/USD's direction this week. Here's an outlook on the key events and a technical analysis for EUR/USD. EUR/USD Graph - with the uptrend channels highlighted: EUR/USD, the world's most popular pair, enjoyed a surprising figure - Germany and France posted growth in the second quarter, earlier than expected. This week's PMI figures, German ZEW Economic Sentiment and three more releases will set the direction for EUR/USD. 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