Fundamental view:

The American dollar has strengthened against the euro but it is ending the week unevenly against them. The US central bank made an announcement that it would begin winding down one of the emergency programs created to support the economy throughout the pandemic.  “Portfolio sales will be gradual and orderly and will aim to minimize the potential for any adverse impact on market functioning,” the Fed said. Overall the euro seemed to struggle against the greenback.

Europe HICP monthly report on 31^st May and Europe Markit Manufacturing PMI & Europe Unemployment Change on 1^st June favored uptrend for the pair whereas US ADP Nonfarm Employment & US ISM Non-Manufacturing PMI Change on 3^rd June and US Factory Orders monthly report on 4^th June favored downtrend for the pair.

The major economic events deciding the movement of the pair in the next week are Europe Employment Change quarterly report, Europe GDP quarterly report, US JOLTS Job Openings at Jun 08, US EIA Crude Oil Stocks Change at Jun 09, US Core CPI monthly report, ECB Interest Rate Decision, US Initial Jobless Claims at Jun 10 and US Michigan Consumer Sentiment at Jun11.

EUR/USD Weekly outlook:

Technical View:

Last week’s high was 0.09% lower than the previous week. Maintaining high at 1.2254 and low at 1.2103 showed a movement of 151 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 1.2094 may open a clean path towards 1.2023 and may take a way down to 1.1943. Should 1.2245 prove to be unreliable resistance, the EURUSD may raise upwards 1.2325 and 1.2396 respectively. Chart formation of a inverted cup and handle pattern in H4 chart sets prospects for a bearish trend. Engulfing formation in H4 chart escalates the expectation for a bearish trend.