Fundamental view:

The Euro had initially tried to rally during the course of the week but gave up gains and fell to the 1.5 level. The US dollar gained strength after the US Federal Reserve delivered as expected. The US Central Bank had kept its interest rates unchanged at 0.25% which was widely expected and announced the reduction of its asset purchases by $15 billion per month. Elsewhere, The Fed is about to taper its $120 billion pandemic-related program later in November with reductions in Treasuries purchases by $10 bln and mortgage-backed securities by $5 bln. As far as inflation is concerned, Federal Reserve Chair Jerome Powell & Co said they still believe high inflation will be transitory, even though Powell noted that supply chain issues would likely extend well into next year, which gives indication that inflation will also remain high.  

ISM Manufacturing Employment on 1st November and Europe Unemployment Rate on 3rd November favored bearish trend whereas Bbk Executive Board Member Wuermeling Speech on 1st November and Europe Markit Manufacturing PMI on 2nd November favored bullish trend for the pair.

The major economic events deciding the movement of the pair in the next week are Fed Chair Powell Speech at Nov 08, Europe ZEW Economic Sentiment Indicator at Nov 09, ECB Non-monetary Policy Meeting, US Initial Jobless Claims, US Federal Budget Balance at Nov 10, US JOLTS Job Openings and Michigan Consumer Sentiment at Nov 12.

EUR/USD Weekly outlook:

Technical View:

Last week’s high was 0.65% lower than the previous week. Maintaining high at 1.1616 and low at 1.1513 showed a movement of 103 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 firm breakout below 1.1514 may fall to 1.1462 and may take a way down to 1.1411. Should 1.1617 prove to be unreliable resistance, the EURUSD may raise upwards 1.1668 and 1.1720 respectively. Chart formation of a Bearish gartley pattern in H4 chart sets prospects for a bearish trend. Bearish engulfing formation in H4 chart escalates the expectation for a bearish trend.