EUR/USD showed limited movement last week, posting slight gains. The upcoming week has six events, including the ECB rate decision. Here is an outlook at the highlights and an updated technical analysis for EUR/USD.

German and eurozone manufacturing PMIs remain mired in contraction territory, as the November readings were 44.1 and 46.9, respectively. The services sector is in better shape, as the PMI readings were above the 50-level, which points to expansion. Other data pointed downwards – eurozone retail sales declined by 0.6%, while German industrial production fell by 1.7%.

In the U.S., there were no surprises from PMI reports, which showed expansion in the services sector, while the manufacturing industry continues to contract. In November, the ISM Manufacturing PMI ticked lower to 48.1, while the Non-Manufacturing PMI slowed to 53.9 pts. There was better news on Friday from key employment reports. Nonfarm payrolls soared to 266,000, up from 128,000 a month earlier. Wage growth remained steady at 0.2%, just shy of the forecast of 0.3%. As well, the unemployment rate dropped from 3.6% to 3.5%. This beat the forecast of 3.6%. On the consumer front, UoM Consumer Sentiment climbed to 99.2, up sharply from 95.7 a month earlier.

EUR/USD daily chart with support and resistance lines on it. Click to enlarge:

1. German Trade Balance: Monday: 7:00. Germany posts surpluses on a regular basis. In September, the surplus widened to EUR 19.2 billion, up from 18.1 billion. Another strong reading is expected in October, with an estimate of 19.0 billion.
2. Sentix Investor Confidence: Monday, 9:30. The index continues to point to pessimism on the part of investors. The decline slowed to -4.5 in November, compared to -16.8 in October. The estimate for December stands at -5.4 pts.
3. German ZEW Economic Sentiment: Tuesday, 10:00. This key indicator is also pointing to pessimism on the part of investors and analysts. However, the decline slowed to -2.1 in November, compared to -22.8 a month earlier. Analysts expect a small gain in December, with a forecast of 1.1 pts.
4. German Final CPI: Thursday, 7:00. German inflation remains weak, which is dragging on inflation levels in the eurozone. Final CPI is expected to confirm the initial estimate of -0.8%.
5. Industrial Production: Thursday, 10:00. This manufacturing indicator slowed to 0.1% in September, down from 0.4% a month earlier. Investors are braced for a decline of 0.2% in October.
6. ECB Rate Decision: Thursday, 12:45. The ECB has pegged interest rates at a flat 0.00% since March 2016, and no change is expected in the upcoming release. Investors will be paying close attention to the rate statement, as the tone of the statement could impact on the movement of EUR/USD.

EUR/USD Technical analysis

Technical lines from top to bottom:

1.1390 has held firm in resistance since June. This is followed by 1.1345.

1.1290 was last tested in early July. 1.1215 is next.

1.1119 switched to resistance in early November.

1.1025 (mentioned last week) remains relevant and is currently an immediate resistance level. 1.0925 is next.

1.0829 has held in support since April 2017.

1.0690 is the final support level for now.

I am bearish on EUR/USD

Economic activity in the eurozone remains soft, and the German locomotive is also showing signs of weakness. With the U.S. economy in much better shape, the euro could have trouble attracting investors.