EUR/USD remained range-bound once again trading almost exclusively in a narrow range. Will growing downside pressures have their say? Final inflation data a German survey stand out. Here is an outlook for the highlights of this week and an updated technical analysis for EUR/USD.
More signs of euro-zone weakness emerged with industrial output falling by 0.8%. The ECB reiterated that the change in wording seen in the last statement was not significant: a removal of stimulus is not getting closer. This came after ECB member Nowotny said that QE will end this year only to have his comments disowned by the wider Bank. In the US, inflation came out as expected but the higher read is a reason to be cheerful for the Federal Reserve according to the FOMC Meeting Minutes, that expressed confidence about the economy and reaching the 2% inflation target. Worries about Syria turned into an airstrike by the US, the UK, and France over the weekend. The concerns were not really felt in EUR/USD.
EUR/USD daily chart with support and resistance lines on it. Click to enlarge:
* All times are GMT
EUR/USD Technical Analysis
Euro/dollar traded in a narrow range around 1.2345 (mentioned last week).
Technical lines from top to bottom:
1.2555 is the three-year high the pair reached in mid-February. 1.2477 was the high point in March but did not hold up for long.
1.2445 capped the pair in early March and remains important. 1.2395 capped the pair in mid-April and is the top of the range.
The round number of 1.2300 was a low point around mid-April and is the bottom of the range. Further below, 1.2270 was a swing low in mid-February and mid-March.
The 1.2210 level which served as a cushion in April is the next level to watch. 1.2155 was a low point in early March and the last line before 1.2090, the 2017 high.
I remain bearish on EUR/USD
With growing signs of euro-zone economic weakness and stronger inflation figures for the US, the pair has room on the downside.
Our latest podcast is titled Volatility venting and Brexit can-kicking
Follow us on Sticher or iTunes
- GBP/USD forecast – Pound/dollar predictions
- USD/JPY forecast – analysis for dollar/yen
- AUD/USD forecast – the outlook for the Aussie dollar.
- USD/CAD forecast – Canadian dollar predictions
- Forex weekly forecast – Outlook for the major events of the week.