EUR/USD had an exciting week, especially around the rate decision, that saw wild action. Mario Draghi will have another opportunity to rck the markets with a scheduled speech and there are quite a few other interesting events. Here is an outlook for the main events and an updated technical analysis for EUR/USD. The ECB cut the rates by 0.25% and left the deposit rate unchanged at 0%. This pushed the euro higher. However, during the press conference, Draghi hinted heavily about a negative deposit rate and sent the euro crashing. In the US, the employment report came out better than expected (especially the revisions) and after an initial negative reaction in EUR/USD, the pair enjoyed risk appetite and recovered. We certainly had a nice share of volatility. Will the action continue? Let’s Start Updates: Spanish Unemployment Change was superb, dropping by 46.1 thousand. This blew away the estimate of a gain of 17.1 thousand. Spanish Services PMI dropped to 44.4 points, missing the estimate of 45.8. Italian Services PMI came in at 47.0, better than the estimate of 46.3. Eurozone Final Services also improved to 47.0, beating the forecast of 46.6. Eurozone Sentix Investor Confidence rose to -15.6 points, but this fell below the estimate of -14.6. Eurozone Retail Sales declined by 0.1%, matching the forecast. ECB President Mario Draghi spoke in Rome. He reiterated that the ECB was open to further rate cuts and to negative deposit rates. French Industrial Production declined by -0.9%, well off the estimate of -0.2%. The French Government Budget deficit increased to 31.0 billion euros. The French trade deficit narrowed to 4.7 billion euros, beating the estimate of 5.3 billion euros. The markets were pleased with German Factory Orders, which gained 2.2%. The estimate stood at -0.4%. EUR/USD has edged higher, crossing above the 1.31 line. The pair was trading at 1.3114. French and German markets are closed on Thursday for a holiday. German Industrial Production looked sharp, jumping 2.2%. The estimate stood at -04%. The ECB released its Monthly Bulletin. EUR/USD has edged lower, as the pair was trading at 1.3133. Friday: the euro is under pressure after the dollar stormed the board and USD/JPY broke above 100. EUR/USD is pressured to the 1.30 line. EUR/USD has edged higher, trading at 1.3114. EUR/USD daily graph with support and resistance lines on it. Click to enlarge: Spanish employment data: Monday, 8:00. The number of people registered as unemployed declined by 4,979 in March from 59,400 addition in February, reaching a total of 5,035,243 unemployed. The decline was mainly in the services sector but was up in construction, agriculture and industry. The Spanish Government imposed steep spending cuts and tax rises, causing further job losses. A gain of 17,100 jobs is forecasted now. Services PMIs: Monday. Italy’s service sector contracted for the 22nd month in March, Efforts to boost growth are at a standstill due to lack of majority in parliament, following February’s national election. Services sector index edged up to 45.5 in March the highest reading in three months, from 43.6 in February, but remaining well below the 50 point line. Meanwhile Spain’s services sector shrank for the 21st month reaching 45.3 in March, up slightly from 44.7 in February and beating forecast for a reading of 44.3, again still a long way from expansion. And the Final value of the euro-zone service sector purchasing managers’ index fell to 46.4 from 47.9 in February, the lowest since October last year. These weak figures indicate the Eurozone still mired in deep recession. Spanish service sector is expected to improve to 45.8, Italy is also expected to increase to 46.3, but the Eurozone service sector is expected to remain at 46.6. Manufacturing PMIs remained depressing. Sentix Investor Confidence: Monday, 9:30. Investor sentiment for the Eurozone declined for the second consecutive month in April, dropped to -17.3 from -10.6 registered in the previous month. The main reason for this fall is the banking crisis in Cyprus. The 1,000 investors surveyed by Sentix in April believed both the economic situation of the Eurozone as well as the economic expectations as clearly weaker than in March. An improvement to -14.6 is forecasted this time. Retail Sales : Monday, 10:00. Euro-zone retail sales decline by 0.3% in February, in line with market forecast. On a yearly base, retail sales declined 1.4% from February 2012. Food, drinks and tobacco sales dropped by 0.1% in February while non-food sector sales fell by 1.1%. The Euro-zone economy experienced five straight quarters of economic contraction ending with Q4 2012, and Markit reported it expects the recession will continue into the first quarter. Another drop of 0.1% is anticipated. Mario Draghi speaks: Monday, 14:00. Mario Draghi President if the ECB will be awarded an honorary degree at the Luiss Guido Carli. He will also give a speech, where he may comment about the ECB rate decision held last week. His words cause volatility in the markets. Any talk about negative rates will hurt the euro.. French Industrial Production: Tuesday, 7:45. French industrial output increased more than expected in February, rising 0.7% after an upwardly revised 0.8% in the previous month, amid increased production in car and aircraft factories. France’s economy remains subdued to domestic budget squeeze and weak euro-area demand. President Francois Hollande is trying to boost economic growth but is challenged by his own ministers calling to ease austerity. Analysts believe, France is in recession and will stay there for at least several more months. A contraction of 0.2% is forecast. German Factory Orders: Tuesday, 11:00. German factory orders edged up well above predictions, rising 2.3% in February, following January’s revised 1.6% drop. Domestic and foreign demand increased, indicating a positive improvement in the first quarter. The current rebound occurred by rising domestic demand from producers of capital goods. A drop of 0.4% is expected now. German Industrial Production: Wednesday, 11:00. German industrial output increased 0.5% in February after a 0.6% fall in the previous month. Industry leaders became more confident about investing in Germany, increasing industrial orders in February. Business leaders believe German economy would accelerate in the second half of this year. A decline of 0.1% is expected. ECB Monthly Bulletin: Thursday, 9:00. The monthly report released in April described the ECB’s outlook following its policy meeting earlier this month. The main points were that the central bank was “ready to act” to boost the recession-hit euro zone economy. Gradual recovery is expected in the second half of this year but is subjected to downside risks German Trade Balance: Friday, 7:00. Germany’s seasonally adjusted trade surplus improved to â‚¬17.1 billion in February as a decline in exports was offset by a larger drop in imported goods. Exports declined 1.5% on the month, the first drop since while. Imports fell a sharper 3.8% on the month and are now down 0.9% on 4Q since the start of the year. The unstable export situation means Germany’s own recovery from a weak 4Q remains a bumpy ride. An increase to a surplus of â‚¬18.1 billion is forecasted. G7 Meetings: Fri-sat. The G7 meetings hosted by the Chancellor of the Exchequer George Osborne and the Governor of the Bank of England Sir Mervyn King, will meet in the UK and discuss the ongoing debt crisis in Europe and the challenges that face the global economy. The meetings are attended by finance ministers and central bankers from 7 industrialized nations. *All times are GMT EUR/USD Technical Analysis Euro/dollar began the week climbing on top of the 1.3030 line . It then surged higher and even briefly breached the 1.32 line (mentioned last week). On Thursday, it had a huge downfall finding support at 1.3030 once again. More choppy trading saw another challenge of 1.3030. Live EUR/USD chart: [do action=”tradingviews” pair=”EURUSD” interval=”60″/]Technical lines from top to bottom: 1.34 was a stubborn cap during the spring of 2012 and continued its stubborn stance in January 2013 – the line now serves as resistance. These are the head and shoulders lines. 1.3350 was a peak in January 2013 and worked very nicely as support during February. The line is weaker now. Below, 1.3290 served as resistance before the pair collapsed in 2012, After many failures to break higher, the euro finally pushed through. 1.3255 provided support during January 2013 and also beforehand. A recovery attempt failed to reconquer this line. 1.32 is a clear top after capping the pair twice in April 2012. This is a round number as well. 1.3160, which separated ranges in May 2013 is a critical line, and it now replaces 1.3170. 1.3100 is a minor line after working as temporary resistance in December 2012. It is followed by 1.3030, which proved be strong support in May 2013, defending the round number. The very round 1.30 line was a tough line of resistance for the September rally. In addition to being a round number, it also served as strong support. It served as a pivotal line of late. 1.2960 provided some support at the beginning of the year and also in September and October – the line is strengthening once again after working as a triple bottom. It remains an important line on the downside. Lower, 1.2880 worked in both directions during 2012 and was the beginning of the uptrend support line. The recent breakdown turned the line into strong resistance. Lower, 1.2805 was the bottom border of the wide 1.2805-1.3170 that characterized the pair’s trading for a long time. Below, 1.2750 worked as a separator of ranges during November, and stopped the pair’s drop in March. This is a key line on the downside, as clearly shown in the first week of April. This is followed by the round number of 1.27, which is a minor line. I am bearish on EUR/USD The ECB acknowledged the worsening situation and cut the rates. With the hint on negative rates, the pressure on the euro could continue. This joins the various debt-crisis related issues in the old continent. In the US, the Fed showed little willingness to add more QE, and recent data was certainly a relief: not only does the US continue gaining jobs, the disappointing data seen earlier was significantly revised to the upside. More technical analysis, just before the recent fall: EUR/USD Reaches Higher on Bullish Correction by James Chen. If you have interest in a different way of trading currencies, check out the weekly binary options setups, including EUR/USD 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. 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 USD/JPY Outlook May 6-10 Anat Dror 9 years EUR/USD had an exciting week, especially around the rate decision, that saw wild action. Mario Draghi will have another opportunity to rck the markets with a scheduled speech and there are quite a few other interesting events. Here is an outlook for the main events and an updated technical analysis for EUR/USD. The ECB cut the rates by 0.25% and left the deposit rate unchanged at 0%. This pushed the euro higher. However, during the press conference, Draghi hinted heavily about a negative deposit rate and sent the euro crashing. 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