The German ZEW Economic Sentiment is the major European event this week. Will it end the Euro rally? Here’s an outlook for the European events and an updated technical analysis for EUR/USD. EUR/USD daily chart with support and resistance lines. Click to enlarge: Riding on weak economic data from the US, EUR/USD edged up to new highs. The big question is if it’s sustainable. We didn’t get many headlines about the debt crisis recently, so the indicators have a bigger role. Let’s start: German ZEW Economic Sentiment: Published on Tuesday at 9:00 GMT. This major survey has a history of hurting the Euro. The European debt issues that rocked the markets at the beginning of May were seen in last month’s change – a 20 point drop to 28.7 points. Also now, a drop is predicted, but it will probably be smaller, to 25.3 points. Note that the all-European figure, released at the same time, is also expected to drop, from 18.8 to 16.8 points. The German figure usually has a stronger impact. CPI: Published on Wednesday at 9:00 GMT. European inflation isn’t a problem, like it is in Britain. The preliminary release, showing an annual rise of 1.4%, will probably be confirmed this time. This doesn’t put any pressure for a rate hike. Trichet can continue leaving the rate at 1%. Industrial Production: Published on Wednesday at 9:00 GMT. After last week’s German industrial production surprised with a strong rise, we’ll see if it managed to pull the whole Euro-zone forward. After a rise of 0.8% last month, a rise of 1.2% will probably be seen now. ECB Monthly Bulletin: Published on Thursday at 8:00 GMT. This monthly release of statistical data contains important economic outlooks for the coming months. It will be interesting to see how the ECB relates to the debt crisis in the continent – whether it sees it as over or not. Trade Balance: Published on Friday at 9:00 GMT. The Euro-zone still enjoys a surplus in the trade balance despite seeing it squeezed. The surplus is likely to drop from 1.6 to 1.3 billion euros this time. EUR/USD Technical Analysis The Euro gradually went up during the week, but struggled to make a convincing break above 1.2670. It did reach 1.2720 (a new line that was added on last week’s outlook), but eventually closed at 1.2670. Looking up above the past week’s peak of 1.2720, EUR/USD will find last year’s line of support at 1.2880 as its next resistance line. Above, 1.3110 was a strong support line before the collapse of the pair, and now provides resistance. The next support line that now turned into a resistance line is 1.3267, still far away for now. Looking down, 1.2608 serves as an immediate line of support after working well in the past week. It’s followed by 1.2480, which is already a strong line of support. Below, 1.2395 is the next minor support line, working temporarily as a resistance line in mid June. Lower, 1.2250 worked as a support line and is still relevant. The strongest support line is 1.2150. This worked as a support line before the Euro collapsed under 1.20, and serving as the bouncing spot before the recent rally. A drop below this line will open the road to a collapse. I return to the bearish sentiment on the Euro. EUR/USD made a strong correction, and is leaning towards the bottom of the uptrend channel. The debt issues in Europe are far from over, and American figures should show the difference once again, resuming the downtrend. If you like this article,please vote for it on Forex Factory. This pair receives many great reviews on the web. Here are my picks: Kathy Lien explains what’s behind the recent Euro gains. Piphut sees a bullish consolidation pattern. Sophia Smith, on Casey’s site, focuses on the Euro vs the Aussie, and sees opportunities. Andrei draws the technical lines, and sees a downtrend. Mohammed Isah examines the key levels for EUR/USD. TheGeekKnows reviews the week and looks forward. Further reading: For a broad view of all the week’s major events worldwide, read the forex weekly outlook. For GBP/USD (cable), look into the British Pound forecast. For the Australian dollar (Aussie), check out the AUD/USD forecast. For the New Zealand dollar (kiwi), read the NZD/USD forecast. For USD/CAD (loonie), check out the Canadian dollar forecast. Ready to connect with real Forex traders? Currensee is the first Forex trading social network. 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 – July 12-16 Yohay Elam 13 years The German ZEW Economic Sentiment is the major European event this week. Will it end the Euro rally? Here's an outlook for the European events and an updated technical analysis for EUR/USD. EUR/USD daily chart with support and resistance lines. Click to enlarge: Riding on weak economic data from the US, EUR/USD edged up to new highs. The big question is if it's sustainable. We didn't get many headlines about the debt crisis recently, so the indicators have a bigger role. Let's start: German ZEW Economic Sentiment: Published on Tuesday at 9:00 GMT. 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