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EUR/USD Forecast Apr. 20-24

EUR/USD managed to stage a nice recovery, mostly thanks to the US dollar's weakness. Can it continue higher? German surveys, PMIs and yet another discussion on Greece stand out this week. Here is an outlook for the highlights of this week and an updated technical analysis for EUR/USD.

The ECB made no changes and also made it clear that it is too early to talk about QE tapering or any change to the deposit rate. The determination to push on with easing despite improving conditions was euro negative on its own, but far from being enough to keep the pair down. The US dollar experienced a series of disappointing figures from retail sales, industrial output, housing data and more. A spring bounce in the US is still awaited. Dollar bulls can cling to the better consumer confidence number for April. And in Europe, can the improvement beat the central bank?

  1. German ZEW Economic Sentiment: Tuesday, 8:00. This 275 strong survey continued rising in the last two months, but fell short of expectations. The rise in optimism is slowing down. After ticking up marginally to 54.8 points in March, a slightly stronger number is expected now: 56 points. The all-European figure carries expectations of 63.7 points.
  2. Consumer Confidence: Wednesday, 14:00. In the past three months, consumers have shown more confidence, with the score hitting -4 in February. Nevertheless, the negative number still implies pessimism. Another rise is on the cards now, to -3 points.
  3. Spanish unemployment rate: Thursday, 7:00. The zone's fourth largest economy suffers from extremely high unemployment levels. In Q4, the economy saw a rate of 23.7%. A small drop to 23.5% is expected now, in the country that has obeyed all the EU demands.
  4. Flash PMIs: Thursday, France at 7:00, Germany at 7:30 and the whole euro-zone at 8:00. France, the second largest economy, saw its manufacturing still in contraction territory, under 50 points in March at 48.8 points and is predicted to tick up to 49.4 points in in April. Services stood at 52.4, reflecting modest growth and a similar score of 52.5 points is on the cards. Germany enjoy modest growth at 52.8 points in its manufacturing sector and 55.4 points in the services sector - more solid growth. Advances to 53.1 and 55.6 respectively are estimated. The whole euro-zone's numbers according to Markit stood on 52.2 for manufacturing and 55.4 for services. These are likely to tick up to 52.6 and 54.5, marginally higher.
  5. Eurogroup meetings on Greece: Friday. The finance ministers of the euro-zone meet in Riga this time and Greece is high on the agenda. Negotiations between the debt stricken country and its partners / creditors are not moving fast since the February 20th accord. Various reforms are not agreed upon as money continues to trickle out of the country and as more payments are due. Defaulting on IMF payments is an option mentioned and denied several times. On the other hand, an agreement may be agreed, and even if one isn't reached, there are always more deadlines in the euro-zone.
  6. German Ifo Business Climate: Friday, 8:00. Germany's conservative think-tank surveys no less that 7000 businesses. It exceeded expectations last time with the headline number reaching 107.9 in March. A small rise is on the cards now, to 108.5 points.
  7. Belgian NBB Business Climate: Friday, 13:00. This leading indicator has improved of late, reaching -6.3 points. However, getting rid of that minus sign could take more time. Another improvement is likely in this 6000 strong survey: -5.8 points.

* All times are GMT