EUR USD Weekly Outlook

While the focal point for last week was USD/JPY, EUR/USD rallied up to a fresh monthly high before finding sellers at the familiar resistance level of 1.1576.

EUR/USD rallied more than 2% from the yearly low, but the first major resistance test should reveal whether buyers can sustain the recovery.

EUR/USD pushed a fresh monthly high, but EUR/JPY broke down to a fresh monthly low, highlighting the dominating factor pushing FX markets with the USD/JPY carry trade reversal.

EUR/USD is stuck in a range just above pivotal support as a four-week standoff enters a critical phase ahead of next week's ECB rate decision.

The EUR/USD ended the week on the back foot, surrendering its earlier poise during Friday’s session. From mid-week until that point, the pair had displayed a rather unexpected degree of composure, even as tensions in the Middle East flared up again. A sharp rebound in crude oil swiftly changed the market narrative by mid-week, herding investors back into cautious, defensive trades. By the final stages, however, the mood had darkened.

EUR/USD enters H2 testing a major support zone as a more hawkish Fed outlook continues to fuel the U.S. Dollar. Can support hold or is a larger breakdown underway?

The EUR/USD found some mild support on profit-taking on Friday when US investors were out. I can’t see the pair falling too much lower from here, and think it is best positioned for a recovery among the majors once the dollar-buying runs its course.

EUR/USD has recovered from recent lows, but the rebound is now colliding with a major pivot zone at the May lows- Fed on tap.

At the time of writing, the US dollar looked set to finish the week on a strong footing after a much stronger-than-expected labour market report prompted investors to reassess the outlook for Federal Reserve policy, sending yields higher.

The EUR/USD is likely to open the week with a gap higher after US president Donald Trump announced over the weekend that a peace agreement between the United States and Iran has been “largely negotiated”.

The EUR/USD outlook remains positive in early parts of the week ahead, thanks to strong momentum and the removal of tariff threats. Trump was at it again during the weekend with fresh tariffs threats on Canada. From a macro point of view, the focus will turn to the FOMC rate decision on Wednesday, in what otherwise seems like a quieter week for traditional data. All told, the risks remain tilted to the upside for EUR/USD.

Looking ahead to the week ahead, the key data releases include PPI and retail sales from the US. If these also disappoint then this should boost the odds of a December cut further and limit the downside risks for the EUR/USD forecast. Still, a lot will depend on risk direction. A struggling equity markets could support the dollar undermine the more risk sensitive euro.