Fundamental view:

The Euro shot higher during the course of the week to reach towards 1.22 level before falling.  Long-term US Treasury yields soared, while shorter-term ones also a made a progress, although to a lesser extent. Bonds were sold off in anticipation of higher inflation and prospects for massive stimulus boosted spending.  The market has already priced in US President Joe Biden’s $1.9 trillion stimulus package. On employment, Powell said that the real unemployment rate could be closer to 10%, adding that there’s a long way ahead of full employment.  When asked about yields, he said that he is not concerned about it, as it’s tied to optimism about the outlook. US policymakers still believe an economic comeback will come later in the year, despite the ultra-loose policy will likely extend into the next one.

US Chicago Fed National Activity Index on 22^nd Feb and Europe GfK Consumer Climate & Europe Consumer Confidence Index on 25^th Feb created downtrend whereas US HPI yearly report on 23^rd Feb and US EIA Crude Oil Stocks Change & US EIA Cushing Crude Oil Stocks Change on 24^th Feb created uptrend for the pair.

The major economic events deciding the movement of the pair in the next week are ECB President Lagarde Speech, US ISM Manufacturing PMI at Mar 01, US ADP Nonfarm Employment Change, US ISM Non-Manufacturing PMI at Mar 03, Europe Retail Sales monthly report, Fed Chair Powell Speech at Mar 04, and US Nonfarm Payrolls at Mar 05.

EUR/USD Weekly outlook:

Technical View:

Last week’s high was 0.60% higher than the previous week. Maintaining high at 1.2243 and low at 1.2062 showed a movement of 181 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 1.2009 may open a clean path towards 1.1945 and may take a way down to 1.1828. Should 1.2189 prove to be unreliable resistance, the EURUSD may raise upwards 1.2306 and 1.2370 respectively. Chart formation of a Bearish butterfly pattern in H4 chart sets prospects for a bearish trend. Spinning top formation in H4 chart escalates the expectation for a bearish trend.