EUR/USD had an uneventful week, registering slight losses. There are eight events on the calendar, including eurozone GPD and PMIs. Here is an outlook at the highlights and an updated technical analysis for EUR/USD.

There was a dump of German data last week. Ifo Business Climate slowed to 90.1 in January, down from 92.1. This was the index’s lowest level since June. Consumer confidence also fell, as GfK Consumer Climate dropped from -7.3 to -15.6 in January, its lowest level since May. CPI jumped to 0.8% for January, up from 0.5% and an 11-month high. German GDP in Q4 slowed to just 0.1%, down from 8.2%. France’s GDP for Q4 came in at -1.3%, its fourth decline in five quarters.

In the US, CB Consumer Confidence rose to 89.3, up from 87.1 beforehand. Durable Goods Orders continued to slip, falling to 0.2% in December. This was well short of the forecast of 1.0%. The Federal Reserve policy meeting reiterated a dovish stance and Fed Chair Powell poured cold water on speculation that the Fed would taper its QE program in the near future. Advance GDP for Q1 posted a respectable gain of 4.0%, close to the estimate of 4.2%.                                                                                                                              .

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

1. German Retail Sales: Monday, 7:00. In November, Retail Sales slowed to 1.9%, down from 2.6% beforehand. Still, this was a respectable gain. Analysts are bracing for a downturn in December, with an estimate of -2.0%.
2. Manufacturing PMIs: Monday, 8:15 in France, 8:30 in Germany, and 9:00 for the whole eurozone. The German and eurozone manufacturing sectors remain well into expansionary territory. The second-estimate PMIs for Germany and the eurozone are expected to confirm the initial readings, with readings of 57.0 and 54.7, respectively. France, Spain and Italy are slightly above the 50-level, which separates contraction from expansion.
3. French CPI: Tuesday, 7:45. Inflation in the eurozone’s second-largest economy posted a second-straight gain of 0.2% in December. However, the forecast for January stands at -0.3%.
4. GDP: Tuesday, 10:00. The markets are preparing for a rough end to the year for eurozone growth. The first estimate for Q4 GDP stands at -1.4%, as the resurgence of Covid-19 is hampering the economy.
5. Services PMIs: Wednesday, 8:15. Services remain in contraction, with readings below the 50-level. The second-estimate PMIs for Germany and the eurozone are expected to confirm the initial readings, at 46.8 and 45.0, respectively. Italy and Spain are expected to show readings in the mid-40s, with Italy bringing up the rear with an estimate of 39.5.
6. Inflation Report: Wednesday, 10:00. Inflation remains weak in the eurozone, but better news is expected for January, The headline reading is expected to improve to 0.4%, while the core reading is expected to climb to 0.7%, which would mark a 6-month high.
7. Retail Sales: Thursday, 10:00. Retail Sales sank in November, with a reading of -6.1%, which was a 7-month low. The markets are expecting a rebound in December, with a gain of 1.4%.
8. German Factory Orders: Friday, 7:00. Factory Orders slowed to 2.3% in November, down from 2.9% beforehand. A sharp downturn is projected in December, with an estimate of -1.2%.

EUR/USD Technical analysis

Technical lines from top to bottom:

We start with resistance at 1.2428.

1.2328 is next.

1.2223 has held in resistance since April 2018.

1.2087 is the first support level.

1.2002 is protecting the symbolic 1.20 line.

1.1844 (mentioned last week) is the final support line for now.

I am neutral on EUR/USD

The eurozone economy continues to struggle with the resurgence of Covid-19. In the US, Biden’s massive stimulus program could weigh on the dollar.