Fundamental view:

Euro traded high during the first half of the week but later gave its gains against the greenback. The hopes for a ceasefire and higher eurozone inflation helped the Euro. The German’s report  showed inflation were up 7.3% YoY in March and the news from Europe’s largest economy and also Spain – which has near 10% yearly inflation has prompted European Central Bank members to mull raising rates this year. This has favored the Euro. 

Russia- Ukraine war is the key catalyst in directing the quote. Moscow may still cut the bloc off from Russian energy. If both sides finally agree on a ceasefire, it would help the currency to climb higher although investors are aware that any deal is fragile.  Meanwhile Talking on Fed, markets continue pricing a high chance of a 50 bps move in May. The US economy gained 431,000 jobs in April, which is far higher than 80,000 expected, moreover, upward revisions, higher wages and a low unemployment rate of 3.6% keeps the Fed on track for aggressive monetary policy, which favored the greenback.

In this week, ADP Nonfarm Employment change on 30th March, Eurozone Markit Manufacturing PMI and Nonfarm Payrolls on 1^st April underpinned bearish trend whereas US CB Consumer Confidence Index on 29^th March and Eurozone CPI monthly report on 30^th March underpinned the bullish trend for the pair.

The major economic events deciding the movement of the pair in the next week are Eurozone Economic and Financial Affairs Council Meeting, US ISM Non-Manufacturing PMI, Fed Governor Brainard Speech at Apr 05, EIA Crude Oil Stocks Change, FOMC Minutes at Apr 06, Eurozone Retail Sales monthly report, ECB Monetary Policy Meeting Accounts, US Initial Jobless Claims at Apr 07 and US WASDE Report at Apr 08.

EUR/USD Weekly outlook:

Technical View:

Last week’s high was 1.04% higher than the previous week. Maintaining high at 1.1185 and low at 1.0944 showed a movement of 241 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. Should 1.0927 proves to be unreliable support then the pair may fall further to 1.0815 and 1.0686 respectively whereas a solid breakout above 1.1168 will open a clear path upward to 1.1297 and then will further raise up to 1.1409. Chart formation of a rising wedge pattern breakout in H4 chart sets prospects for a bearish trend. Bearish Harami formation in H4 chart escalates the expectation for a bearish trend.