Euro/dollar staged a very impressive recovery on fresh hopes and promises. Will this continue? There are too many doubts. Two major German surveys are the highlights of this week. Here is an outlook for the market moving events, and an updated technical analysis for EUR/USD. Merkel and Sarkozy promised to get serious. Plans for bank recapitalization and a comprehensive solution for the debt crisis are reportedly on the way and these promises were enough to boost the euro for now. But, banks remain worried as big Greek haircuts are on the cards, up to 60%. When will we get full answers? Probably within the next three weeks. EUR/USD daily chart with support and resistance lines marked. Click to enlarge: German ZEW Economic Sentiment: Tuesday, 9:00. This highly regarded survey of around 350 analysts and investors tends to be at the lower end of economic indicators. In the past 4 months, the number has been negative, indicating pessimism in Europe’s largest economy. From last month’s -43.3 points, a small rise is likely now. The figure for the whole continent will probably remain similar to last month’s -44.6 points. Current Account: Wednesday, 8:00. While Germany enjoys a surplus, the balance for the whole continent remains negative. The deficit in the current account grew to 12.9 billion last month, the highest in 7 months. This deficit will likely squeeze now. German PPI: Thursday, 6:00. After a surprising jump two months ago, producer prices in Germany corrected with a small drop of 0.3%. A small rise is expected now. The ECB already acknowledged that inflation is heading down, but still didn’t act on the rates. Consumer Confidence: Thursday, 14:00. This official publication from Eurostat has shown pessimism for a long time. After many months between -10 and -12, the past two months have show a deterioration, with the figure hitting -19 in August. Another drop is likely for the month of September. German Ifo Business Climate: Friday, 9:00. The week begins with a big survey and ends with a big one as well. And this one is usually more optimistic, yet recent events have weighed heavily on the result. After a peak of 114.5 points reported in June, we are now at 107.5 points. Another fall is likely now. This publication always has a strong impact. * All times are GMT. EUR/USD Technical Analysis Euro/dollar jumped at the beginning of the week and quickly reached the first significant resistance line at 1.37 (mentioned last week). After struggling at this area, the pair made a break higher, but failed to breach 1.3838 several times. Technical lines from top to bottom: We start from higher ground this week: 1.4160 was a pivotal line when the pair was trading higher and is now minor resistance. 1.41 is another minor line. 1.4030 is already a strong line, just above the round number of 1.40. It worked in both directions, and especially as support. 1.3950 was a notable bottom during May and also beforehand. Just below, the recent peak at the round number of 1.39 is another minor line. 1.3838, which was a swing low a few months ago and was later tested on a failed recovery attempt, is strong resistance now.1.38 was a swing high in September and is now only a weak line. The round number of 1.37 was a peak for several days at the end of September and proved to be a distinct line separating ranges. 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.. 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. I am neutral on EUR/USD Worries about the banking sector balance the hopes from the full approval of the EFSF. After promises for plans have pushed the pair higher, its time for details. Convincing details can extend the surge, but more waiting until the October 23 summit is likely to erode the gains, or at least prevent further rises. The scenario of an orderly Greek default at the beginning of November seems more and more real. See more details about it in the quarterly outlook below. 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 EUR/USD ForecastMajors share Read Next USD/CAD Outlook – October 17-21 Anat Dror 11 years Euro/dollar staged a very impressive recovery on fresh hopes and promises. Will this continue? There are too many doubts. Two major German surveys are the highlights of this week. Here is an outlook for the market moving events, and an updated technical analysis for EUR/USD. Merkel and Sarkozy promised to get serious. Plans for bank recapitalization and a comprehensive solution for the debt crisis are reportedly on the way and these promises were enough to boost the euro for now. But, banks remain worried as big Greek haircuts are on the cards, up to 60%. 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