EUR/USD posted slight gains last week, as the pair ended the week just shy of the 1.13 mark. There are five events in the upcoming week, including eurozone and German inflation. Here is an outlook at the highlights and an updated technical analysis for EUR/USD. 

In Germany, manufacturing rebounded in May. Factory Orders rebounded in May with a gain of 10.4%, although this was short of the forecast of 15.1%. This followed a disastrous April, which saw a decline of 25.8 percent. Industrial Production gained 7.8%, after a plunge of 17.9% in the previous release. As well, retail sales climbed 17.8%, up sharply from -11.7% beforehand.

In the eurozone, Sentix Investor Confidence remained in negative territory, but has been showing improvement. The July release came in at -18.2, up from -24.8 beforehand. Retail sales showed a strong gain of 17.8% after a decline of 11.7% in the previous release.

Over in the US, the services sector showed a strong rebound in June. The ISM Non-Manufacturing PMI jumped to 57.1, up from 45.4 beforehand. This reading showed significant expansion. Unemployment claims continue to fall, albeit at a slow rate. Last week’s reading was 1.31 million, down from 1.42 million. The Producer Price Index disappointed. The headline read came in at -0.2%, while Core CPI declined by -0.3%.

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

1. German Final CPI: Tuesday, 6:00. Inflation has been weak in the eurozone’s locomotive. CPI declined by 0.1% in May, down from 0.4% beforehand. A strong rebound is forecast for June, with an estimate of 0.6%.
2.  ZEW Economic Sentiment: Tuesday, 9:00. Investor optimism jumped to 63.4 in June, up from 51.0 a month earlier. The indicator has made an impressive recovery since falling to -49.5 back in March. Another strong showing is expected in July, with a forecast of 60.1.
3. French Final CPI: Thursday, 6:45. France continues to post soft inflation numbers. The initial read of -0.1% in June is expected to be confirmed in the final release.
4. ECB Rate Decision: Thursday, 11:45. The ECB is expected to maintain interest rates at a flat 0.00%. Investors will be keenly interested in the rate statement, given the severe economic conditions gripping the eurozone.
5. Eurozone Inflation: Friday, 9:00. In May, the headline reading came in at 0.1%, down from 0.3% a month earlier. The estimate for June stands at 0.3%. The core read is expected to come in at 0.8%, after two straight readings of 0.9%.

EUR/USD Technical analysis

Technical lines from top to bottom:

We start with resistance at 1.1573. 1.1515 is next.

1.1435 was a low point at the beginning of February.

1.1280 remains relevant. Currently, it is an immediate support line.

1.1215 is the first line of support.

1.1119 is next.

1.1025 (mentioned last week) has provided support since late May.

1.0920 is the final support level for now.

I remain neutral on EUR/USD

The euro has shown limited movement since mid-June, unable to establish a strong breakout. The eurozone continues to exhibit weak economic conditions, but with the US economy also struggling, the lack of a trend could well continue.