- The EUR/USD weekly forecast tilts to the downside under 1.1600 amid a softer ECB guidance and fading Fed rate-cut expectations.
- Upbeat US data continues to keep the dollar strong, with eyes on next week’s GDP and inflation data.
- Technically, the pair stays bearish, with room to test the 200-MA at around 1.1400.
EUR/USD ended the week under slight pressure as attempts to rise repeatedly failed. As recent data did little to narrow policy divergence between the European Central Bank and the Federal Reserve, price action showed the market remains wary of the euro.
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Recent Eurozone releases showed slowing GDP and softening inflation, supporting the assumption that the ECB is in a “hold phase” and won’t tighten in the near term.
The euro lacks a fundamental tailwind due to slowing inflation and sluggish demand. Hence, EUR/USD struggled to capitalize on dollar stability and instead reacted to US flows.
However, upbeat US macro data and a healthy job market faded near-term rate-cut expectations, keeping the greenback strong. The dollar’s yield advantage capped EUR/USD’s upside into the weekly close.
Next Week’s Key Events for EUR/USD
Both sides of the Atlantic will have a busy macro schedule next week. Flash PMI surveys for German manufacturing and services will be watched to gauge economic activity. If things worsen, growth worries will rise, and the euro will fall. To maintain disinflation, markets will monitor Eurozone CPI numbers, especially core inflation.
In the US, markets will eye advanced GDP, core PCE inflation, and flash PMIs. Core PCE is the Fed’s preferred inflation measure, making it crucial. A solid number would support the higher-for-longer narrative and the dollar, while unfavorable news could change rate expectations.
EUR/USD Weekly Technical Forecast: More Cushion for the Bears
EUR/USD concluded the week below 1.1600, slightly below a major horizontal level, indicating momentum was weakening. The price is below the 20- and 50-day moving averages, and the 100-day moving average near 1.1660 prevents gains, adding short-term bearish pressure.
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Immediate support lies between 1.1580 and 1.1550. If the price closes below this zone, it could open the door to testing the 200-day MA near 1.1400. Upside recovery attempts could find resistance between 1.1700 and 1.1800. The RSI is below 40, indicating bearish momentum without oversold conditions. This suggests additional downside unless support holds.
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