EUR/USD Weekly Forecast (27th December 2021 – 31st December 2021)

Fundamental view:

The Euro initially tried to rally against the greenback but later gain up small gains in last 2 trading days of this week. This week was favorable to majors currencies against the greenback due to the upbeat market sentiment ahead of Christmas. The catalysts improving the market mood were the Omicron variant being 80% less susceptible to needing hospitalization.  Further in the UK, two studies reported the same results as in South Africa, though the percentage of people was between 50% to 70%. Moreover the US Food and Drug Administration (FDA) approved Covid-19 treatments by Pills by Pfizer and Merck. Elsewhere, It is worth recalling that the so-called dot plot indicated that the Fed could hike rates at least three times next year, this capped the bullish trend.

Euro zone PPI monthly report on 21^st December and US Core Durable Goods Orders monthly report on 23^rd December favored bearish trend on the other hand US Existing Home Sales on 22^nd December and Euro zone GDP quarterly report on 23^rd December favored bullish trend for the pair.

The major economic events deciding the movement of the pair in the next week are US S&P/CS HPI Composite-20 yearly report at Dec 28, ECB M3 Money Supply yearly report, EIA Crude Oil Stocks Change, US Pending Home Sales monthly report at Dec 29, Eurozone CP monthly report, Initial Jobless Claims and MNI Chicago Business Barometer at Dec 30.

EUR/USD Weekly outlook:

Technical View:

Last week’s high was 0.15% higher than the previous week. Maintaining high at 1.1343 and low at 1.1234 showed a movement of 109 pips.

In the upcoming week we expect EUR/USD to show a bullish trend. The currency pair is trading above the 100 Simple Moving Average and the MACD trades to the upside. A solid breakout above 1.1361 may open a clean path towards 1.1407 and may take a way up to 1.1470. Should 1.1252 prove to be unreliable support, the EURUSD may sink downwards 1.1189 and 1.1143 respectively. In H4 chart, if breakout of the Symmetrical triangle is to the upside then bullish expectation is favored. Also to be noted bullish engulfing formation exerts the expectation of uptrend for the pair.