Fundamental view:

The EUR bounced against greenback in the previous week and reached 1.2149 but was unable to hold on to gains above the 1.2100 figure. The advance is related to the dollar self-weakness. The American currency fell off investors’ radar after the release of a tepid Nonfarm Payroll report, maintaining its sour tone throughout the week. US government debt yields soared, a sign of mounting optimism mostly related to the passing of a US stimulus package. Long-term bond yields reached levels lastly seen in March 2020 but quickly retreated afterwards. Optimism faded as the week went by, but the greenback remained near its weekly low.

Europe Exports monthly report & Current Account n.s.a. on 9^th February and US CPI monthly report on 10^th February favored downtrend for the pair whereas Europe Industrial Production monthly report and industrial report on 8^th February and Wholesale Price Index on 11^th February created uptrend for the pair.     

The major economic events deciding the movement of the pair in the next week are Europe Employment Change quarterly report, Europe GDP quarterly report at Feb 16, Fed Industrial Production yearly report at Feb 17, ECB Monetary Policy Meeting Accounts, US Initial Jobless Claims, Philadelphia Fed Manufacturing Index at Feb 18, and FOMC Member Rosengren Speech at Feb 19.

EUR/USD Weekly outlook:

Technical View:

Last week’s high was 0.10% higher than the previous week. Maintaining high at 1.2149 and low at 1.2020 showed a movement of 129 pips.

In the upcoming week we expect EUR/USD to show a bearish trend. The currency pair is trading below the 200 Simple Moving Average and the MACD trades to the downside. A solid breakout below 1.2045 may open a clean path towards 1.1968 and may take a way down to 1.1916. Should 1.2174 prove to be unreliable resistance, the EURUSD may raise upwards 1.2226 and 1.2303 respectively. Chart formation of a double top pattern in H4 chart sets prospects for a bearish trend. Bearish engulfing formation in H4 chart escalates the expectation for a bearish trend.