Fundamental view:

The Euro has rallied significantly during the course of the week. A scarce macroeconomic calendar, uneventful central banks and corona virus-related concerns offset hopes that vaccine immunization will soon put an end to the pandemic and let economies return to the growth path. In the meantime, The US Federal Reserve is having a monetary policy meeting next Wednesday, the most relevant event of the week, although the central bank is expected to maintain its monetary policy unchanged. 

US TIC Net Long-Term Transactions on 20^th January and Europe Trade Balance on 21^st January created bearish trend whereas Europe CPI FOI excl. Tobacco yearly report on 18^th January and Europe Trade Balance on 19^th January created bullish trend for the pair.

The major economic events deciding the movement of the pair in the next week are ECB President Lagarde Speech at Jan 25, US CB Consumer Confidence Index at Jan 26, US Core Durable Goods Orders monthly report, Fed Interest Rate Decision at Jan 27, US GDP quarterly report, US Initial Jobless Claims at Jan 28, and Europe GDP quarterly report at Jan 29.

EUR/USD Weekly outlook:

Technical View:

Last week’s high was 0.27% lower than the previous week. Maintaining high at 1.2190 and low at 1.2054 showed a movement of 136 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 1.2082 may open a clean path towards 1.2000 and may take a way down to 1.1946. Should 1.2218 prove to be unreliable resistance, the EURUSD may raise upwards 1.2272 and 1.2354 respectively. Chart formation of a Bearish butterfly pattern in H4 chart sets prospects for a bearish trend. Spinning top formation in H4 chart escalates the expectation for a bearish trend.