EUR/USD Weekly Outlook: Key Levels & Events Ahead

Last Week’s Price Action Recap

The forex markets remained volatile through the week of July 21-25, with EUR/USD displaying notable weakness as we approach the tail end of July. Let’s break down what happened across the major pairs:

EUR/USD started the week strong at 1.1441 (July 21 open) but gradually lost ground throughout the week. After peaking at 1.1476 on July 15, the pair has been in a steady downtrend. By Friday’s close (July 24), EUR/USD settled at 1.1367—a decline of approximately 1.1% from the week’s opening, closing the week near session lows. The pair tested support around 1.1364 mid-week but couldn’t establish sustained buying interest.

GBP/USD faced similar headwinds, as the British pound struggled against dollar strength. Risk-off sentiment and expectations of a more hawkish Federal Reserve stance weighed on commodity-linked currencies and growth-sensitive pairs alike.

USD/JPY remained supported above the 145.00 handle throughout the week, as the higher interest rate differential between the Fed and Bank of Japan continued to attract carry traders. The yen remained subdued despite typical “risk-off” triggers that normally benefit safe-haven demand.

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Key Technical Levels to Watch This Week

EUR/USD

Resistance: 1.1450, 1.1500, 1.1550
Support: 1.1350, 1.1300, 1.1250
Pivot: 1.1400 (psychologically important mid-week)

The pair broke below the 1.1400 level on Friday and momentum remains to the downside. Watch for a potential test of 1.1350 early in the week. Any bounce above 1.1400 would need to clear 1.1450 to suggest a genuine reversal.

GBP/USD

Resistance: 1.2650, 1.2700, 1.2800
Support: 1.2550, 1.2500, 1.2400
Pivot: 1.2600

Sterling weakness persists, and a break below 1.2550 would open the door to 1.2400—a level not tested since early June.

USD/JPY

Resistance: 146.50, 147.00, 147.50
Support: 145.00, 144.50, 144.00
Pivot: 145.50

The pair remains in a structural uptrend. Support at 145.00 is critical; a break below would suggest a significant shift in risk sentiment.

Economic Calendar & Central Bank Events

The week of July 28 - August 1 presents several critical data releases and speaker events that could drive meaningful volatility:

Monday, July 28

Eurozone Flash Manufacturing PMI (preliminary estimate) - Expected to show ongoing weakness in European manufacturing
US Markit Manufacturing PMI - Could reflect cooling economic momentum

Impact: PMI data often sets the tone for the week. A weaker-than-expected manufacturing reading could accelerate EUR/USD weakness, as it would support Fed tightening expectations relative to ECB easing speculation.

Tuesday, July 29

ECB Governing Council Member Speeches - Watch for commentary on recent rate decisions
US Advanced Trade Balance - May provide clues on external demand

Impact: Any dovish messaging from the ECB could weigh on the euro further, while the trade balance typically has modest impact unless significantly surprised.

Wednesday, July 30

ADP Employment Change (US) - Private sector job growth indicator
US Services PMI - Critical for assessing service sector health
Federal Reserve speakers - Multiple Fed officials scheduled for commentary

Impact: This is a heavy day. Strong ADP and Services PMI could reinforce expectations for a “higher for longer” interest rate environment, which would support USD strength and likely push EUR/USD toward support levels. Fed speakers may provide forward guidance on rate trajectory.

Thursday, July 31

Initial Jobless Claims - Weekly unemployment metric
ECB Interest Rate Decision Announcement - No new decision expected, but markets will parse recent communications
German Manufacturing PMI (final) - Key data point for Eurozone manufacturing

Impact: These releases are typically lower impact individually, but collectively could set up Friday’s employment report. Watch claims data for sudden spikes that might suggest labor market deterioration.

Friday, August 1

Non-Farm Payroll (NFP) - The crown jewel of US economic releases
US Unemployment Rate & Average Hourly Earnings - Labor market detail
ISM Manufacturing Index - Broader factory activity measure

Impact: Friday’s NFP report is the most important release of the week. A strong reading (220K+ jobs) would likely:

Cement expectations for elevated Fed rates longer
Push USD/JPY higher
Push EUR/USD lower toward 1.1300
Potentially trigger stop-losses on long euro positions

Conversely, a weak reading (below 150K jobs) could suggest labor market cooling and trigger a sharp reversal, pushing EUR/USD back toward 1.1450.

Trading Scenarios for the Week

Bullish EUR/USD Scenario

Trigger: Weak US economic data (PMI below 50, disappointing NFP, rising jobless claims)

If the economic data points to a softening US labor market and services sector weakness, the market will reprrice Fed rate expectations downward. This could lead to a sharp reversal in EUR/USD.

Target Levels: 1.1450 (first target), 1.1500 (secondary), 1.1550 (major resistance)
Confirmation: Close above 1.1450 on Wednesday or Thursday would signal a reversal pattern forming
Risk Management: Stop-loss below 1.1320 for bullish trades

Bearish EUR/USD Scenario

Trigger: Strong NFP, resilient services PMI, Fed hawkish messaging

This is the more likely scenario given current momentum. If Friday’s employment report shows robust job creation (230K+) and jobless claims remain low, the Fed will maintain its hawkish stance. This scenario likely extends the euro’s weakness.

Target Levels: 1.1350 (near-term), 1.1300 (major support), 1.1250 (extended downside)
Confirmation: Breakdown below 1.1350 with volume would accelerate selling
Risk Management: Stop-loss above 1.1450 for bearish trades

Range-Bound Scenario

Trigger: Mixed data (some strong, some weak) with no clear trend

This is also plausible given we’re entering the final week of July with potential summer liquidity concerns. If data is inconclusive, the pair could consolidate between 1.1350-1.1450.

Trading Strategy: Fade extremes; buy support at 1.1350, sell resistance at 1.1450
Confirmation: Tight closes with limited range expansion signals consolidation
Risk Management: Tighter stops (20-30 pips) are appropriate in ranging markets

Key Considerations

1. Summer Liquidity: Late July often sees reduced trading volumes as traders take vacation. This can amplify moves on lower liquidity and create whipsaw conditions. Exercise caution with oversized positions.

2. Fed Rate Path: The market is currently pricing in a 25-basis-point rate cut sometime in the fall, but strong data could delay this indefinitely. Watch Fed speakers for any shifts in this narrative.

3. ECB Divergence: The European Central Bank is widely expected to cut rates before the Fed, supporting structural EUR/USD weakness. This headwind shouldn’t be ignored.

4. Technicals Matter: The 1.1400 level break was significant. A weekly close below 1.1350 would establish a new downtrend with targets extending to 1.1250. Conversely, a weekly close above 1.1450 would signal reversal potential.

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This analysis is for educational purposes only and does not constitute financial advice. Trading forex carries significant risk. Past performance is not indicative of future results.