Fundamental view:

The Euro has rallied during the last week and reached 1.22 level , this is because of the speculation that the Fed will have to tighten its ultra-loose monetary policy sooner than anticipated. Federal Bank chief Jerome Powell has repeated multiple times that the current policy will remain in place until they see further progress toward its goals of full employment and price stability. Europe’s vaccination campaign continues at full force and is supported the Euro.

US TIC Net Long-Term Transactions on 17^th May and Europe Core CPI monthly report  on 19^th May, Europe Markit Manufacturing PMI on 21st may favored bearish atmosphere whereas Europe CPI FOI excl. Tobacco monthly report on 17^th May and Europe Construction Output on 20^th May favored bullish atmosphere for the pair.

The major economic events deciding the movement of the pair in the next week are Fed Governor Brainard Speech at May 24, Europe Ifo Business Climate, US CB Consumer Confidence Index at May 25, US GDP quarterly report, US Core Durable Goods Orders monthly report at May 27, Europe GDP quarterly report and US Michigan Consumer Sentiment at May 28. 

EUR/USD Weekly outlook:

Technical View:

Last week’s high was 0.52% higher than the previous week. Maintaining high at 1.2245 and low at 1.2139 showed a movement of 106 pips.

In the upcoming week we expect EUR/USD to show a bullish trend. The currency pair is trading above the 200 Simple Moving Average and the MACD trades to the upside. A solid breakout above 1.2237 may open a clean path towards 1.2294 and may take a way up to 1.2343. Should 1.2131 prove to be unreliable support, the EURUSD may sink downwards 1.2082 and 1.2025 respectively. Chart formation of an ascending scallop’s pattern in H4 chart sets prospects for a bullish trend. Hammer formation in H4 chart escalates the expectation for a bullish trend.