Euro/dollar lost a lot of ground as serious doubts about European seriousness came to light. Apart from the all-important EU Summit during the weekend and the apparent follow up on Wednesday, we have quite a few important indicators, with PMI numbers in the limelight.Here is an outlook for the market moving events, and an updated technical analysis for EUR/USD. The potential haircut for Greece can reach 60%. Bank recapitalization is between 100 and 200 billion euros, but the big dispute is about the EFSF bailout fund, its uses and its leverage. Germany and France are working on a solution. A happy compromise might not be sufficient to settle the markets. Here are 4 reasons why the summit will fall short. Update: Very partial progress was made in EU Summit on Sunday. This isn’t likely to convince the markets. It’s not only the European debt crisis. Also economic sentiment in Europe’s locomotive, Germany, is dropping. The chances of a rate cut in the euro-zone in the next meeting are rising. It was already discussed last time. EUR/USD daily graph with support and resistance lines on it. Click to enlarge: Flash PMI: Monday. Begins in France at 7:00, continues in Germany at 7:30 and ends for the whole continent at 8:00. Purchasing managers’ indices are pointing to a squeeze in the old continent. Manufacturing is contracting for two months, and the services sector also joined last month, with PMIs under 50 points – the border between growth and contraction. Among leading countries, Germany’s manufacturing sector and France’s services sector are still growing. Will this last this time? They are both expected to slide to the verge of contraction. Further drops are expected. These publications will provide a choppy opening to the trading week in Europe. Industrial New Orders: Monday, 9:00. The value of new orders in the manufacturing sector has dropped significantly in the past two months. After the drop of 2.1% seen last month, a small correction is expected now: +0.1%. NBB Business Climate: Tuesday,13:00. Belgium, at the core of Europe, is also showing deteriorating economic conditions. The figure has been negative in the past 6 months, and no improvement is expected. The score will likely dip from -9.4 to below -10. German CPI: Thursday. The German states will release the CPI figures one by one during the day. Given the drops in commodity prices, only a small rise of 0.1% in headline CPI is predicted now after a minimal rise of the same scale last month. This might have an impact on the next rate decision, the first to be held by Mario Draghi. GfK German Consumer Climate: Thursday, 7:00. A factor that can keep prices high in Germany is the relatively strong consumer confidence. According to GfK, this has remained relatively stable above 5 points. A small drop from last month’s 5.2 points is expected now. M3 Money Supply: Thursday, 8:00. The slowdown isn’t reflected in money supply, at least not in August, when the pace rose by a surprisingly strong 2.8%. A return to a pace of around 2% is likely now. French Consumer Spending: Friday, 6:45. Europe’s second largest economy is seeing an overall squeeze in consumer spending in recent months. Last month saw two simultaneous releases which offset each other and fell below expectations of a rise. A rise of 0.1% is expected now.. * All times are GMT. EUR/USD Technical Analysis Euro/dollar stared off the week in a relatively calm manner and managed to remain above the 1.3838 line (mentioned last week) for some time. It then dropped and traded in a lower range, clearly marking 1.3650 as a bottom, before making a late surge and closing the week virtually unchanged. Technical lines from top to bottom: We start from high ground: 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. The pair closed just under this line for a second week in a row. 1.3838, which was a swing low a few months ago and was later tested on a failed recovery attempt, is now somewhat weaker.1.38 was a swing high in September and is another weak line. 1.3725 worked as support several times in October and is now of higher importance.The double bottom of 1.3650 seen in October replaces 1.3630 and is a strong line of support. 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. 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 turn from neutral to bearish on EUR/USD After a week of hope and a week of tension, this week could be more decisive for Europe. The leaders in Europe are struggling to reach a decision about a significant step forward regarding the debt crisis, needless to say a comprehensive one. While an agreement will likely be reached and celebrated, it could turn into a poor compromise that will just drag the situation further. Needless to say that implementing decisions is another issue. In addition, the weakness of Europe’s economy is another drag, especially when compared to some more positive signs in the US. The scenario of an orderly Greek default at the beginning of November seems more and more real but it probably won’t be an elegant one. 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/CHF Outlook – October 24-28 Yohay Elam 11 years Euro/dollar lost a lot of ground as serious doubts about European seriousness came to light. Apart from the all-important EU Summit during the weekend and the apparent follow up on Wednesday, we have quite a few important indicators, with PMI numbers in the limelight.Here is an outlook for the market moving events, and an updated technical analysis for EUR/USD. The potential haircut for Greece can reach 60%. Bank recapitalization is between 100 and 200 billion euros, but the big dispute is about the EFSF bailout fund, its uses and its leverage. Germany and France are working on a solution. 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