Fundamental view:

The Euro broke down significantly during the week, slicing through the 1.16 level, an area that will cause a certain amount of psychological importance and support. The second wave of coronavirus is taking its toll in the northern hemisphere, with cases in Europe rising exponentially and the US reaching a record of over 85K new contagions in one day. What gives the greenback an advantage is that the US economy remains open, while in Europe, more restrictions have been announced this week. German and France have been the latest to take tougher social measures in an attempt to curve the spread of the virus. 

US Goods Trade Balance on 28th October and Europe Spanish Flash CPI yearly report on 29^th October favored bullish trend for the pair whereas Europe German ifo Business Climate on 26^th October and Durable Goods Orders monthly report on 27^th October favored bearish trend for the pair.

The major economic events deciding the movement of the pair in the next week are US ISM Manufacturing PMI at Nov 02, Euro Government Budget Balance at Nov 03, US ADP Nonfarm Employment Change, ISM Non-Manufacturing PMI at Nov 04, Fed Interest Rate Decision at Nov 05, Euro Nonfarm Payrolls quarterly report, and US Nonfarm Payrolls at Nov 06.

EUR/USD Weekly outlook:

Technical View:

Last week’s high was 0.17% lower than the previous week. Maintaining high at 1.1860 and low at 1.1640 showed a movement of 220 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 1.1571 may open a clean path towards 1.1495 and may take a way down to 1.1351. Should 1.1791 prove to be unreliable resistance, the EURUSD may raise upwards 1.1935 and 1.2011 respectively. Chart formation of a three falling valleys pattern in H4 chart sets prospects for a bearish trend. Bearish engulfing formation in H4 chart escalates the expectation for a bearish trend.