EUR/USD collapsed on the Turkish crisis that threatens to cause some damage to euro-zone banks. Will it continue falling? The upcoming week features further fallout from this crisis and also all-important GDP figures. Here is an outlook for the highlights of this week and an updated technical analysis for EUR/USD.

Turkey is suffering from high inflation and has no significant policy to tackle it. The American decision to impose sanctions on two Turkish ministers due to the imprisonment of an American pastor exacerbated the fall of the Turkish Lira. The problem turned from local to global when a report in the FT said the European Central Bank is concerned about the stability of three major European banks with exposure to Turkey. EUR/USD was already pressured by unimpressive German data and the trade tensions between the US and China which pushed the greenback higher. The Turkish crisis pushed it to new 2018 lows where cascading stop-loss points turned the fall into an avalanche. In the US, Core CPI came out at 2.4% y/y, better than expected, providing further fuel for the Fed to raise rates.

Updates:

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