Fundamental view:

The Euro has fallen against its US counterpart during the course of the week, showing signs of extreme negativity after the Federal Reserve spooked everybody. Elsewhere The central bank shifted its cautious tone without much warning, forwarding chances of rate hikes. The dot-plot has showed that most Fed officials expect to raise rates in 2023 twice from a previous stance of no hikes until 2024. The current monetary policy was left unchanged as expected.

Europe Industrial Production yearly report on 14th June and US NY Fed Empire State Manufacturing Index on 15th June favored uptrend for the pair whereas Europe Labour Cost Index & Europe Wage Costs yearly report on 16th June and US Philadelphia Fed Employment & US Continuing Jobless Claims on 17th June favored downtrend for the pair.

The major economic events deciding the movement of the pair in the next week are Fed Chair Powell Testimony at Jun 22, ECB Non-monetary Policy Meeting, US Markit Manufacturing PMI at Jun 23, Europe Ifo Business Climate, US GDP quarterly report, US Core Durable Goods Orders, US Initial Jobless Claims at Jun 24 and US Core PCE Price Index at Jun 25.

EUR/USD Weekly outlook:

Technical View:

Last week’s high was 0.57% lower than the previous week. Maintaining high at 1.2147 and low at 1.1847 showed a movement of 300 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 1.1756 may open a clean path towards 1.1652 and may take a way down to 1.1456. Should 1.2056 prove to be unreliable resistance, the EURUSD may raise upwards 1.2252 and 1.2356 respectively. Chart formation of a descending scallop pattern in H4 chart sets prospects for a bearish trend. Three inside down formation in H4 chart escalates the expectation for a bearish trend.