EUR/USD Weekly Forex Forecast – 19th to 23rd Feb 2018
Technical Outlook: The euro currency posted a strong reversal mid-week as price broke past the resistance level near 1.2362 – 1.2331 with strong conviction. The breakout resulted in the EUR/USD rising to post a fresh three year high at 1.2550. However, the gains were limited as the currency pair was seen giving up the gains easily. The reversal after posting the fresh high suggests a pullback for the moment. Watch for a modest decline in EUR/USD to 1.2362 – 1.2331 region where support could now be established. This could potentially signal a fresh rally in the EUR/USD targeting the previous highs of 1.2550 and further. To the downside, if the support fails to hold, watch for a decline towards 1.2070.
Fundamental Outlook: The week ahead from the Eurozone see’s a relatively quiet data period. Most of the events are second tier events and are unlikely to impact the markets much. On Tuesday, the German ZEW economic sentiment data will be a key event to watch for. With the renewed optimism on the Eurozone growth, the data will cover the month of February and will show if businesses remained upbeat on the growth. Later in the week, the flash services and manufacturing PMI numbers will be coming out for the month of February. On Friday, the final inflation figures for the Eurozone will be released. Consumer prices in the Eurozone remained mixed as per the flash estimates. Headline CPI was seen to be weakening while core CPI has managed to rise slightly.