Fundamental view:

The Euro has fallen hard during the course of the trading week but later picked up. The dominant downtrend was interrupted on Wednesday, following the release of US inflation figures. The central bank is trying to cool down tightening expectations by saying that heating inflation will likely be temporary and resting on the tepid progress in the job sector which will help to maintain the ultra-loose monetary policy. On the other hand, there have been a couple of weeks of silence from ECB after European policymakers pledged to maintain a “persistently accommodative” monetary policy as the pandemic impacted over the economic recovery.

Europe Trade Balance on 9th August and Europe ZEW Economic Sentiment Indicator on 10th August created downtrend whereas US Core CPI monthly report on 11th August and US Michigan Consumer Sentiment on 13th August created uptrend for the pair.

The major economic events deciding the movement of the pair in the next week are US NY Fed Empire State Manufacturing Index at Aug 16, Europe Employment Change quarterly report, Europe GDP quarterly report, US Retail Sales monthly report, US Fed Industrial Production monthly report at Aug 17, FOMC Minutes at Aug 18, US Philadelphia Fed Manufacturing Index and US Initial Jobless Claims at Aug 19. 

EUR/USD Weekly outlook:

Technical View:

Last week’s high was 0.79% lower than the previous week. Maintaining high at 1.1805 and low at 1.1706 showed a movement of 99 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 1.1733 may open a clean path towards 1.1670 and may take a way down to 1.1634. Should 1.1832 prove to be unreliable resistance, the EURUSD may raise upwards 1.1868 and 1.1931 respectively. Chart formation of a Bearish butterfly pattern in H4 chart sets prospects for a bearish trend. Harami formation in H4 chart escalates the expectation for a bearish trend.