Fundamental view:

The Euro had largest weekly gain since March 2020 and reached fresh 2022 high of 1.1483. The Major currency pair was following the uptrend since the starting of the week due to broad US dollar weakness and soared after the ECB meeting. US Central bank policymakers diluted expectations of a hefty 50 basis points hike in March even with inflation at a 40-year high with their recent speech, which weighed on the US dollar. On the other hand, European Central Bank President Christine Lagarde with her hawkish tone surprised market players, following the release of a mildly dovish statement.  She expressed logical concerns on mounting price pressures, and said that “compared with our expectations in December, risks to the inflation outlook are tilted to the upside, particularly in the near term,” She also refrained from saying that a rate hike this year would be unlikely. Traders are expecting a possible rate hike by the end of 2022.

However, The US dollar came back on Friday with upbeat NFP data, US managed to add 467K new job positions, which is very high than the expectation of -192k. Meanwhile the Unemployment Rate ticked higher to 4%, while the Participation Rate jumped to 62.2%, signaling quite a healthy recovery in the sector. Overall, The Euro had a good week.

In this week, Eurozone GDP quarterly report on 31^st January and US Nonfarm Payrolls on 4^th February favored bearish trend whereas ISM Manufacturing PMI on 1^st February, US ADP Nonfarm Employment Change, Eurozone CPI monthly report on 2^nd February and ECB Interest Rate Decision on 3^rd February favored bullish trend for the pair.

The major economic events deciding the movement of the pair in the next week are ECB President Lagarde Speech, Eurozone Industrial Production yearly report at Feb 07, ECB Supervisory Board Member Fernandez-Bollo Speech at Feb 08, US EIA Crude Oil Stocks Change, US WASDE Report at Feb 09, Initial Jobless Claims, Federal Budget Balance at Feb 10 and Michigan Consumer Sentiment at Feb 11.

EUR/USD Weekly outlook:

Technical View:

Last week’s high was 1.21% higher than the previous week. Maintaining high at 1.1483 and low at 1.1138 showed a movement of 345 pips.

In the upcoming week we expect EUR/USD to show a bullish trend. The currency pair is trading above the 200 Simple Moving Average and the MACD trades to the upside. A solid breakout above 1.1575 may open a clean path towards 1.1701 and may take a way up to 1.1920. Should 1.1230 prove to be unreliable support, the EURUSD may sink downwards 1.1011 and 1.0885 respectively. Chart formation of an ascending scallop pattern in H4 chart sets prospects for a bullish trend. Bullish harami formation in H4 chart escalates the expectation for a bullish trend.