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The EUR/USD currency pair's weekly forecast illustrated neutral-to-moderately-bullish momentum this week, as the euro strengthened amid easing political tensions in France. Meanwhile, the dollar remained under pressure amid lower yields and revived trade war fears.

The pair pulled back towards the 1.1650 level from the weekly top of 1.1730, as the dollar slightly rebounded. However, the cooling US yield, with the 10-year treasury falling below 4%, weighed on the dollar. 

From France, PM Sebastian Lecornu’s survival of two no-confidence votes and the delay in pension reforms have calmed the political upheaval. Still, the French government has been making attempts to advance a strict year-end budget through parliament. If it’s successful, it could revive volatility and limit the euro. 

The ongoing US-China trade frictions are also a key global risk factor to consider. Any further pressure could cap euro gains and trigger safe-haven demand for the dollar.

This persistent instability has dampened investor confidence and strengthened expectations for further Fed easing, which could likely weaken dollar growth. Meanwhile, any easing in Europe’s fiscal challenges and risk sentiment could cause the euro to recover.

EUR/USD Key Events Next Week

The major key events in the coming week include the following:

• Initial Jobless Claims
• Continuing Jobless Claims
• Consumer Price Index
• Eurozone PMIs
• US PMIs

Traders will continue to await the initial and continuing jobless claims and consumer price index next week for insights into expectations of Fed rate cuts and the economic outlook. However, the primary focus will remain on the PMI readings to gauge the business activity in both the US and Europe.

EUR/USD Weekly Technical Forecast: Selling Pressure Under the 1.1700 Level
 

(Click on image to enlarge)

EUR/USD daily chart

The EUR/USD weekly technical outlook indicated a mild bearish bias after the pair pulled back from the 1.1700-1.1720 zone. The currency pair stayed pressured below the 1.1685 support level and the 20-day MA, reflecting the market dominance of the sellers. Overall, the pair maintained a medium-term sustained phase. The support was seen sitting at the levels of 1.1500 and 1.1380. 

The RSI rested at 47, signaling neutral-to-mildly-bearish momentum in the near-term. A decisive breach above the 1.1720 mark could potentially extend gains towards the 1.1800 area. Failure to sustain above the 1.1600 level may trigger a further downtrend.

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