The EUR/USD weekly forecast was impacted by the US economy expanding at a larger 1.4% rate in Q1. The US core PCE report showed softer inflation, leading to rising expectations of a Fed rate cut. The focus for next week will be on the US monthly employment report.
EUR/USD had a slightly bullish week as the dollar weakened. The main focus was on the core PCE price index, US GDP, consumer confidence, and unemployment claims. The US economy grew at a 1.4% rate in Q1, with consumer confidence higher than expected and unemployment claims showing strength in the labor market. The softer inflation data increased expectations for a rate cut in September.
Next week, significant reports from the US will include manufacturing business activity, FOMC meeting minutes, and nonfarm payrolls. Fed Chair Powell will also speak, while investors will review the ECB meeting minutes in the Eurozone. The primary focus will be on the US monthly employment report, with economists expecting 180,000 additional jobs. The ECB and Fed minutes will provide insight into rate cut outlooks for the US and Eurozone.
On the technical side, the EUR/USD price broke above its resistance trendline but paused at the 1.0900 key resistance level before pulling back. It has fallen below the 22-SMA to retest the trendline and the 1.0700 key support level, currently in a strong support zone. If this support holds, the price could bounce higher to retest the 1.0700 resistance level, confirming a bullish trend.