Fundamental view:

The Euro traded low against the greenback and the pair reached to a weakest level of 1.1120 on Friday, which was last seen in June 2020. The US dollar was trading high since the start of the week but rallied after the US Central bank monetary policy announcement. Federal bank has meet the expectation by keeping the rates and tapering unchanged and repeated that pandemic related financial support will end in March. The Fed Chairman Jerome Powell provided many hawkish signals in his press conference. He told that he will not rule out a rate hike in every meeting this year and also gave hint of March Liftoff. Meanwhile Russia – Ukraine geopolitical tensions also underpinned the bullish move of the US dollar.

On the other hand, European Central Bank is about to have a monetary policy meeting on Thursday next week. It is widely anticipated that ECB will maintain its current policy unchanged, maintaining the cautious approach to future changes.

In this week, US Markit Manufacturing PMI on 24^th January and Eurozone  Jobseekers Total on 26^th January favored bullish trend whereas Eurozone Markit Services PMI on 24^th January, FOMC Press Conference on 26th January and Core Durable Goods Orders monthly report on 27^th January favored bearish trend for the pair.

The major economic events deciding the movement of the pair in the next week are Eurozone group GDP quarterly report at Jan 31, US ISM Manufacturing PMI at Feb 01, US ADP Nonfarm Employment Change, EIA Crude Oil Stocks Change at Feb 02, ECB Interest Rate Decision, Initial Jobless Claims, US ISM Non-Manufacturing PMI at Feb 03 and US Nonfarm Payrolls at Feb 04.

EUR/USD Weekly outlook:

Technical View:

Last week’s high was 0.79% lower than the previous week. Maintaining high at 1.1344 and low at 1.1121 showed a movement of 223 pips.

In the upcoming week we expect EUR/USD to show a bearish trend. The currency pair is trading below the 100 Simple Moving Average and the MACD trades to the downside. Should 1.1065 proves to be unreliable support then the pair may fall further to 1.0982 and 1.0842 respectively whereas a solid breakout above 1.1288 will open a clear path upward to 1.1428 and then will further raise up to 1.1511. In H4 chart descending channel pattern breakout downside favors prospects for a bearish trend. Also to be noted bearish engulfing formation exerts the expectation of downtrend for the pair.