Fundamental view:

The Euro has broken significantly during the course of the week and slumped to its weakest level since July 2020 at 1.1263 on Wednesday due to the greenback continuing to gain strength on inflation fears. The quote has lost more than 1% for this week. ECB Governing Council Member Isabel Schnabel said that the ECB’s decision to continue to buy bonds was a sign that a rate hike was not imminent. Isabel Schnabel added that the rise in inflation was a welcome development.  As a reply, European Central Bank (ECB) President Christine Lagarde crossed the wires on Friday and argued that it wouldn’t make sense to tighten the policy prematurely when inflation pressures are expected to fade. “Tighter policy would only exacerbate the contractionary effect on the economy,” He said.  On Friday, Austria announced a nationwide lockdown due to the rising number of coronavirus cases which made the pair to fall further. Amidst all the catalysts, Euro portrayed a downtrend.

In this week, Eurozone Employment change on 16^th November and US Building Permits on 17^th November favored uptrend whereas US Retail sales monthly report on 16^th November and ECB President Lagarde Speech on 19^th November favored downtrend for the pair 

The major economic events deciding the movement of the pair in the next week are US Markit Manufacturing PMI at Nov 23, Eurozone Business Climate, US GDP quarterly report, US Core Durable Goods Orders monthly report, US Initial Jobless Claims, Michigan Consumer Sentiment, FOMC Minutes at Nov 24, Eurozone GDP quarterly report and ECB Monetary Policy Meeting Accounts at Nov 25.

EUR/USD Weekly outlook:

Technical View:

Last week’s high was 1.24% lower than the previous week. Maintaining high at 1.1464 and low at 1.1250 showed a movement of 214 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 1.1199 may create a fall to 1.1118 and may take a way down to 1.0985. Should 1.1413 prove to be unreliable resistance, the EURUSD may raise upwards 1.1546 and 1.1627 respectively. Chart formation of a descending scallop’s pattern in H4 chart sets prospects for a bearish trend. Shooting star formation in H4 chart escalates the expectation for a bearish trend.