EUR/USD ends week unchanged, hovering around 1.0700

Near the end of the week, EUR/USD is hovering near 1.0700, trading around the same area it ended a week ago. The euro failed to hold to gains, and after falling sharply on Thursday, it erased previous gains. On Friday the pair rose, on the back of a modest correction of the US dollar in the market. 

During the American session, the pair rose above 1.0700 and peaked at 1.0724, boosted after the release of US 4Q GDP data. But the pair failed to extend the rally and pulled back to 1.0680. Earlier, on Asian hours, the 1.0655 zone, gave support to the euro, like it did on Thursday. That level has become an important short-term support. 

EUR losing strength? 

After gaining ground during five consecutive weeks, EUR/USD stabilized after finding resistance at 1.0770, and it was about to end unchanged, on the week the Dow Jones index reached 20,000. 

Next week, the economic calendar is busy. In the US, the main events will be the Federal Reserve meeting and the employment report. In the Eurozone, many economic reports will be released. They include GDP, inflation, and retail sales. 

No change in interest rates is expected from the Fed next week. The FOMC statement will be watched closely for signals of how soon could the next hike be. If the markets consider that a March rate hike is on the cards, the US dollar could rally in the market.  

Technical outlook 

The long-term technical outlook for the EUR/USD remains bearish according to Fawad Razaqzada, analyst at forex.com. “The real selling pressure could start if/when price moves and stays below the 1.05 handle. That is when the yearly range will probably start to expand as price most likely heads towards – and potentially beyond – parity.” He warns that a major high could be about to form in the coming weeks or months on the EUR/USD.

“Conversely, if the EUR/USD starts to break above more resistance levels then the above bearish view will become less appealing. Some of the short-term key resistance levels are at 1.0710 and 1.0870, though more significant levels are at 1.1300 and 1.1500”, said Razaqzada.