The EURUSD plunged more than 400 pips to 1.10 last week, as a bearish confirmation pattern erased nearly four-month highs. The weekly outlook on the EURUSD is bearish, as the pair is likely to test the 1.0900 support line amid ongoing negotiations between Greece and the European Union about a new bailout.
Below is a breakdown of the key events this week for the EURUSD.
Federal Reserve vice chair Stanley Fischer and FOMC member Loretta Mester will deliver speeches on an otherwise uneventful Memorial Day holiday in the United States. Trade volumes are expected to be very light to start the week, with Germany, the UK and France also observing national holidays.
One of the week’s biggest releases takes place on Tuesday when the Commerce Department reports on April durable goods orders. Orders for manufactured goods meant to last three years or more are forecast to decline 0.2 percent in April after rebounding 4 percent in March. Excluding transportation equipment, durable goods orders are forecast to rise 0.5 percent.
Separately, the Commerce Department will report on April new home sales. Sales in this volatile category plunged 11.4 percent in March.
Markit Group will release its preliminary estimate of May services PMI. The US service economy weakened in April, as output and new orders growth eased from the previous month. However, service sector jobs accelerated at the fastest pace in ten months, indicating that the US labour market was on firm footing at the start of the second quarter.
In Europe, GfK will release its forward-looking German consumer confidence index. Consumer confidence is forecast to remain elevated in June with a reading of 10.0. The index reached 10.1 in May.
The European Union will also release its biannual Financial Stability Review, which monitors financial risks and vulnerabilities in the euro area economy. The report could acknowledge the broad economic recovery in the Eurozone, but could also flag ongoing concerns over the Greece bailout crisis. Greece and the troika of creditors remain far apart on a bailout resolution, with the International Monetary Fund pegging June 5 as the real deadline for a new agreement.
The National Association of Realtors will report on April pending home sales, a forward-looking indicator of US home sales. Pending home sales increased 11.1 percent annually in March.
Separately, the European Commission will release five economic indicators, including business climate, economic sentiment and consumer confidence.
The Commerce Department will close out the week with revised first quarter GDP figures. Initial estimates showed the US economy expanded just 0.2 percent annually in the first quarter. With the latest batches of economic data, economists expect the US economy to have contracted up to 1 percent annually in the first three months of the year.
Meanwhile, Germany will report on April retail sales on Friday. Retail sales tumbled 2.3 percent in April, but were up 3.5 percent year-on-year.