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- The Fed Vice President’s comments generated positive expectations for the US economy.
- US employment data beat expectations, lending strong support to the greenback.
- The price could break the 1.1700 barrier next week.
The EUR/USD weekly forecast has had a bearish end, reaching new lows every day. At the moment, it is well below the 1.1800 level. Since the beginning of the week, all attempts to advance towards the level of 1.19 failed.
This week the US dollar has managed to recover some ground after the statements of the previous week by the Fed Chair, Jerome Powell, who ruled out a change in the country’s monetary policy for the moment.
However, this week the statements of the Fed Vice Chairman Richard Clarida encouraged investors by assuring that the central bank is preparing the way to regularity and even saying that by the end of the year or early 2022, it could announce the rise in interest rates for 2023.
The statements of the Fed representatives are accompanied by the positive economic results of July. As announced in the middle of the week, 943,000 new jobs were created in the previous month, much more than the 870,000 expected. Furthermore, the unemployment rate fell to 5.4%, and underemployment fell to 9.2%.
On the European side, although retail sales increased 4.2% month-over-month in Germany, June factory orders increased 26.2%, far from the previous 54.9%. Industrial production also registered a slight advance, only 5.1% year-over-year, a low percentage compared to 16.6% in the previous period.
Upcoming Events
The main relevant economic events for the EUR/USD pair will take place on the North American side starting Wednesday. For next week, the consumer price and product price indices will be published. The relevance of this data is due to high inflation in the United States and the Fed’s decision to update its monetary policy.
As for the CPI, an increase of 0.5% is expected compared to the 0.9% of the previous period. For the PPI, the increase should be 0.6% compared to 1.0%. If the forecasts are fulfilled, a slowdown in inflation would be confirmed, strengthening the US dollar.
EUR/USD Weekly Technical Analysis: SMAs Pointing at More Losses
The pair closed the week near the July lows and prepared to test new lows next week. It could even break the 1.1700 barrier. The immediate support level is 1.1751. The 20-day SMA maintains a slightly bearish slope, but it is well above the current level. On the other hand, the moving averages look to converge around the 1.1500 level.
EUR/USD Weekly Forecast – Daily Chart
EUR/USD Next Week Forecast
The pair’s price will depend on the inflation results published for next week. However, it is expected to test the support levels at 1.1751 and 1.1703. Below those levels, the price may move towards 1.1600. Resistance levels may be at 1.1840, followed by 1.1920.
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