Euro/dollar fell to new lows, made an impressing recovery of almost 400 pips but eventually closed at the same place. The upcoming week consists of industrial production and inflation numbers standing out. Here is an outlook for the upcoming events, and an updated technical analysis for EUR/USD. Trichet’s last rate decision include massive bank liquidity but no rate cut. This and the fresh suspense in the Greek drama provided some breathing space for the beaten euro. But troubles are far from over and suspense doesn’t last too long. The action is set to resume. EUR/USD daily graph with support and resistance lines on it. Click to enlarge: German Trade Balance: Monday, 6:00. Europe’s largest economy has experienced a drop in its high trade surplus in recent months – from over 15 billion euros a few months ago to only 10.1 billion last month. A drop under 10 billion is likely now. French Industrial Production: Monday, 6:45. Europe’s second largest economy’s industrial output rebounded last month with a rise of 1.5%. A drop in the same scale was seen beforehand. A small drop will not be a surprise now. Sentix Investor Confidence: Monday, 8:30. This wide survey of 2000 investors turned from optimism to pessimism two months ago, as the score turned negative. A drop to around -20 points is predicted now. Industrial Production: Wednesday, 9:00. The figure for the whole continent is published after Germany and France published their numbers. Nevertheless, it still has a strong impact. The rise of 0.9% see in July will probably be followed with a similar drop in August. ECB Monthly Bulletin: Thursday, 8:00. One week after Trichet’s last rate decision, the European Central Bank will release the statistics it used to make its decisions. This usually has a strong impact on the euro. CPI: Friday, 9:00. The initial release of the headline consumer price index was quite a surprise – a rise to a pace of 3%. This figure, mostly based on a jump in Italian prices, will probably be revised to the downside. Core CPI, which stands at a low level of 1.2%, will likely tick up to 1.5%. Trade Balance: Friday, 9:00. While Germany enjoys a high surplus, the EMU as a whole has a deficit in the balance of goods. It stood on -2.5 billion euros last month. A small squeeze is predicted now, to around 1 billion. * All times are GMT. EUR/USD Technical Analysis Euro/dollar dropped under the 1.3360 line (mentioned last week) but quickly closed the gap. It then made a dramatic downfall to a new 9 month low, at 1.3144, before recovering and trade in range. A rally towards the end of the week didn’t hold eventually, and we close at 1.3378, about only 10 pips away from last week. Technical lines from top to bottom: 1.3950 was a notable bottom during May and also beforehand. This is the first and distant resistance line. 1.38 was a swing high in September and marks the beginning of downtrend resistance. The round number of 1.37 was a peak for several days at the end of September and is another high resistance line. It also served as resistance early in the year. The low of 1.3630 seen in September is weaker now, after being run through. 1.3550 provided support early in September and then switched to resistance after the fall. It worked better as support, but is now resistance. 1.3450 is the next line of resistance, an update from 1.3430. It capped the pair and also worked as minor support recently. The bottom seen earlier in October at 1.3360 is the next line. The pair is very close to this line for a second week in a row. It is an important pivotal line. More important support is at 1.3250 which held the pair early in the year. The recent 9 month low at 1.3145 is the next important line that will be closely watched on any downfall. A key line before the round number of 1.30 is support at 1.3080. Towards the end of 2010, it prevented deeper falls. The round number of 1.30 is eyed by many. Although it wasn’t a significant line of struggle in the past, a break below this line will have a big psychological effect. The ultimate trough of 2011 at 1.2873. Downtrend resistance Previous lines haven’t prevailed, but this line emerges as a clear winner. It begins at the beginning of September, and is followed twice: at the end of September and just now. I am neutral on EUR/USD. The assumption of an orderly default at the beginning of November seems more real: Europe is preparing the banks for further shocks. The emergency at Dexia was a trigger. In addition, the revelation that Greek has money until November helps this theory as well and also provides breathing time for the euro to stabilize. The positive Non-Farm Payrolls in the US also give some time. Just to make things clear: the situation isn’t good in Europe: the recent downgrades reflect that, but a slowdown or a pause in the downfalls can prevail for now. If you are interested in an alternative 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 USD/CAD (loonie), check out the Canadian dollar For the Swiss Franc, see the USD/CHF 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 Expert score 5 Etoro - Best For Beginner & Experts0% Commission and No stamp DutyRegulated by US,UK & International StockCopy Successfull Traders 5 Read Review Open My Free Account Your capital is at risk. EUR/USD ForecastMajors share Read Next USD/CAD Outlook – October 10-14 Anat Dror 10 years Euro/dollar fell to new lows, made an impressing recovery of almost 400 pips but eventually closed at the same place. The upcoming week consists of industrial production and inflation numbers standing out. Here is an outlook for the upcoming events, and an updated technical analysis for EUR/USD. Trichet's last rate decision include massive bank liquidity but no rate cut. This and the fresh suspense in the Greek drama provided some breathing space for the beaten euro. But troubles are far from over and suspense doesn't last too long. The action is set to resume. 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