Fundamental view:

Euro traded its lowest at this week. The market moves with the idea of US dollar strength. The FX board is depending on 2 things – higher chances of US tapering and the spread of the coronavirus Delta variant. Fed published the minutes of its latest FOMC meeting which indicated that the policymakers are ready to discuss the timing of tapering in the upcoming meeting. This time, however, hints suggested that retrieving monetary support will be faster than previously anticipated.

US TIC Overall Net Capital Flow on 16th August and Europe Current Account on 19th August created uptrend whereas Europe GDP yearly report on 17th August and US EIA Crude Oil Stocks Change on 18th August created downtrend for the pair.

The major economic events deciding the movement of the pair in the next week are Europe GDP quarterly report at Aug 24, Europe Ifo Business Climate, US Core Durable Goods Orders monthly report, US EIA Crude Oil Stocks Change at Aug 25, ECB Monetary Policy Meeting Accounts, US GDP quarterly report, Us Initial Jobless Claims at Aug 26 and Fed Chair Powell Speech at Aug 27. 

EUR/USD Weekly outlook:

Technical View:

Last week’s high was 0.03% lower than the previous week. Maintaining high at 1.1801 and low at 1.1664 showed a movement of 137 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 1.1642 may open a clean path towards 1.1585 and may take a way down to 1.1505. Should 1.1779 prove to be unreliable resistance, the EURUSD may raise upwards 1.1859 and 1.1916 respectively. Chart formation of a pennant pattern in H4 chart sets prospects for a bearish trend. Bearish engulfing formation in H4 chart escalates the expectation for a bearish trend.