EUR/USD dropped to the lowest in 7 years before recovering and ending the week on a balanced note. Where will it go next? The Italian elections provide a strong start to the week after Germany will have a grand coalition. The ECB decision will gain attention later on. Here is an outlook for the highlights of this week and an updated technical analysis for EUR/USD.

Euro-zone inflation ticked down to 1.2% y/y as expected and core inflation is stable at 1%. Other figures were mixed, with manufacturing PMI data coming out as expected, German retail sales were disappointing but German employment data beat expectations. There was greater drama in the US: Fed Chair Powell hinted that the Fed may raise rates four times this year, expressing a cautiously optimistic tone. Later on, President Trump announced tariffs on steel and aluminum, sending stocks and bond yields lower, allowing EUR/USD to recover. The EU has threatened to retaliate.

Updates:

EUR/USD daily graph with support and resistance lines on it. Click to enlarge: