Fundamental view:

The Euro has fallen during the week, as US dollar has strength this week. US Federal Reserve Chairman Jerome Powell testified before Congress on monetary policy. In his semi-annual presentation, he repeated that inflationary pressures are likely to be temporary and pledged to maintain the financial support until the economy fully recovers. European Central Bank President Christine Lagarde also gave comments on monetary policy. The ECB has decided to be flexible with inflation, announcing that the 2% target is not a benchmark but rather a level around which inflation could oscillate.

Europe CPI monthly report on 13th July and Europe Trade Balance n.s.a. on 16th July created a downtrend whereas Europe Wholesale Price Index monthly report on 12th July and US Business Inventories monthly report on 16th July created an uptrend for the pair.

The major economic events deciding the movement of the pair in the next week are US Building Permits at July 20, US EIA Crude Oil Stocks Change at July 21, ECB Interest Rate Decision, ECB Monetary Policy Press Conference, US Initial Jobless Claims, US CB Leading Economic Index monthly report at July 22 and US Markit Manufacturing PMI at July 23.  

EUR/USD Weekly outlook:

Technical View:

Last week’s high was 0.13% lower than the previous week. Maintaining high at 1.1880 and low at 1.1771 showed a movement of 109 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 1.1757 may open a clean path towards 1.1709 and may take a way down to 1.1648. Should 1.1866 prove to be unreliable resistance, the EURUSD may raise upwards 1.1927 and 1.1975 respectively. Chart formation of an inverted cup and handle pattern in H4 chart sets prospects for a bearish trend. Bearish Engulfing formation in H4 chart escalates the expectation for a bearish trend.