Fundamental view:

The EUR/USD has ended the week with a year lowest level. Demand for the US dollar is supported by comments from US Federal Reserve chief Jerome Powell. Fed head Powell noted that supply chain issues could lead to a longer interval of higher inflation, calling the latter “frustrating” and seeing it running into 2022. “Whereas European Central Bank President Christine Lagarde has also delivered a similar message. “We’re back from the brink, but not completely out of the woods,” also added that the supply-chain disruptions were accelerating in some sectors while rising energy prices were something to watch. Policymakers are somewhat concerned but are still optimistic that the current issues are a temporary consequence of the ongoing post-pandemic recovery.

In this week, US HPI monthly report on 28th Sep and US Core PCE Price Index monthly report on 1st Oct created bullish trend whereas Europe ECB Non-Financial Corporations Loans yearly report on 27th Sep and Europe CPI monthly report on 29th Sep created bearish trend for the pair.

The major economic events deciding the movement of the pair in the next week are Eurogroup Meeting, OPEC Meeting at Oct 01, US ISM Non-Manufacturing PMI at Oct 05, ECB Non-monetary Policy Meeting, US ADP Nonfarm Employment Change, US EIA Crude Oil Stocks Change at Oct 06, US Initial Jobless Claims at Oct 07 and US Nonfarm Payrolls at Oct 08.

EUR/USD Weekly outlook:

Technical View:

Last week’s high was 0.26% lower than the previous week. Maintaining high at 1.1725 and low at 1.1562 showed a movement of 163 pips.

In the next 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 1.1530 may lead to the path towards 1.1465 and may take a way down to 1.1367. Should 1.1693 prove to be unreliable resistance, the EURUSD may raise upwards 1.1791 and 1.1856 respectively. Chart formation of a descending triangle pattern breakout in H4 chart creates prospects for a bearish trend. Bearish harami formation in H4 chart further escalates the expectation for a bearish trend.