Fundamental view:

The Euro has initially tried to rally during the course of the trading week but later gave up gains and ended with a bearish candle. The Central banks are facing inflationary pressures amid post-pandemic supply chain issues and soaring energy prices, And at the same time economic recoveries are losing momentum. As Tighter monetary policies could be double edge sword, Global policymakers have tried hard to down talk regarding inflation but all at vain. The ECB had its meeting in this week, while the US Federal Reserve will do so next week, announcing the outcome on Wednesday, November 3. The European Central Bank left its monetary policy unchanged as anticipated, and the statement was quite similar to the previous statement.

Europe PPI yearly report on 26th October and ECB Interest Rate Decision on 28th October favored bullish trend for the pair whereas US New Home Sales on 26th October and Michigan Consumer Expectations on 29th October favored bearish trend for the pair.

The major economic events deciding the movement of the pair in the next week are US ISM Manufacturing PMI at Nov 01, Europe Government Budget Balance, US ADP Nonfarm Employment Change, Fed Interest Rate Decision at Nov 03, US Nonfarm Productivity quarterly report at Nov 04, Europe Retail Sales monthly report and US Nonfarm Payrolls at Nov 05.

EUR/USD Weekly outlook:

Technical View:

Last week’s high was 0.20% higher than the previous week. Maintaining high at 1.1692 and low at 1.1535 showed a movement of 157 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 1.1499 may fall to 1.1439 and may take a way down to 1.1342. Should 1.1656 prove to be unreliable resistance, the EURUSD may raise upwards 1.1753 and 1.1813 respectively. Chart formation of a Bearish ALT Bat pattern in H4 chart sets prospects for a bearish trend. Bearish harami formation in H4 chart further escalates the expectation for a bearish trend.