Fundamentally, the EURO saw disappointing figures from last week which send the Euro lower during last week’s trading session against its counter-parts. French and German Manufacturing PMI’s along with German business sentiment deteriorated in May added to expectations for easing by the European Central Bank at its upcoming June meeting. Recent comments by senior Euro Central Bank officials have signaled that the bank is open to acting as soon as June to stop inflation in the currency bloc from falling too low.
Moreover on Thursday, ECB Governing Council member Jens Weidmann said the bank is prepared to take unconventional measures to counter the risks of low inflation in the euro zone. On Friday,the greenback was boosted after data on new home sales added to signs of a recovery in the housing market.
Technically, weekly bias in the EURO/USD remains on the downside as 21 and 55 EMA’s, RSI, Stochastic and MACD oscillators are all still showing signs of bearish continuation on the 4 hours, Daily and Weekly time-frames. However i suggest a decent retracement on the 1 hour time-frame to a recent supply zone around 1.37327 for a wave 4 elliot formation before looking for a fresh signal for selling to . On the other side, a clear break of resistance 1.37327 would dampen the current bearish trend and we could be seeing some bullish correction to 1.38200.
Key Economic indicators to watch out for is the USD Core Durable Goods Orders m/m, CB Consumer Confidence, Prelim GDP q/q, Unemployment Claims, Pending Home Sales m/m. Economic indicators from the Euro zone that will be monitored by investors also include the German Retail Sales and Money Supply.