EUR/USD Weekly Forecast: Eurozone Financial Woes Deepen…

• Tensions between Russia and Ukraine escalated this week as the 2 international locations exchanged missiles.

• Merchants apprehensive about Trump’s tariff proposals.

• Eurozone enterprise exercise knowledge revealed a pointy financial slowdown. 

The EUR/USD weekly forecast factors South as merchants worry a pointy decline within the Eurozone economic system and looming ECB price cuts.

Ups and downs of EUR/USD

The EUR/USD pair had a bearish week amid geopolitical and commerce tensions and downbeat Eurozone financial knowledge. Tensions between Russia and Ukraine escalated this week as the 2 international locations exchanged missiles. Furthermore, Russia threatened using nuclear energy, elevating fears of accelerating tensions that may harm the Eurozone economic system. In consequence, the euro plunged. 

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On the similar time, merchants apprehensive about Trump’s tariff proposals that might cut back demand for European vehicles. Consequently, the economic system would possibly deteriorate, weighing on the euro. Lastly, markets raised probabilities of a December ECB price reduce after Eurozone enterprise exercise knowledge revealed a pointy financial slowdown. 

Subsequent week’s key occasions for EUR/USD

Subsequent week, the US will launch studies, together with the Fed minutes, GDP, and sturdy items orders. The core sturdy items orders and the GDP studies will present the well being of the US economic system. Upbeat numbers will present a resilient economic system, lowering the probability of a price reduce in December. However, if the numbers are available poorer than anticipated, market individuals will add on to bets for a December Fed price reduce.

In the meantime, the FOMC assembly minutes will comprise clues on future Fed coverage strikes. For the reason that assembly got here after Trump received the US election, policymakers could have develop into extra cautious. A cautious tone would possibly decrease the probability of one other price reduce this 12 months. 

EUR/USD weekly technical forecast: Bearish sentiment grows beneath 1.0500

On the technical aspect, the EUR/USD value has damaged beneath the 1.0500 help stage after a steep decline from the 22-SMA resistance. The value reversed to the draw back after making a double high and breaking beneath the SMA. Bulls tried to take management by breaking above the SMA. Nevertheless, the value made a bearish engulfing candle that led to a speedy decline. 

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In the meantime, the RSI exhibits sturdy bearish momentum, that means the downtrend will doubtless proceed subsequent week. Subsequently, bears would possibly goal the 1.0301 vital help stage. The pattern will solely reverse when the value breaks above the 22-SMA resistance and the RSI begins buying and selling above 50.

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