Technical Outlook: EURUSD continued with further gains last week and the bullish momentum is only set to strengthen further with this week's ECB meeting. On the 4-hour chart, EURUSD has formed an inverse head and shoulders pattern and this will keep the bullish bias intact. On Friday, EURUSD broke past the previous highs formed at 1.1249 which marked the resistance level of the inverse head and shoulders pattern. With Friday's price action breaking out, we can expect the euro to reach the minimum upside to 1.1343. Look for any dips to 1.1249 where support could be formed following which the EURUSD will push higher. Even on the daily chart, we have a bullish flag formation that suggests the upside towards 1.1350 region. The bullish bias will be invalidated only on a close below 1.1200. Fundamental Outlook: The euro heads to a busy week with the European Central Bank (ECB) meeting due on Thursday. It will be a big event as the market expectations are currently pricing in a hawkish outcome. No changes are expected from the central bank, but the ECB is widely expected to announce that the economic recovery in the Eurozone continues in the upward trend and that this makes the case for removing some of the QE. The ECB is expected to announce tapering by September or October. This sets the stage for some strong moves in the euro, especially if the ECB disappoints the markets. This is something that is not new to the markets. Inflation, according to flash estimates slipped in May according to data from Eurostat. This potentially complicates the outcome from the ECB next week. Previous EURUSD Weekly Forex Forecast

EURUSD Weekly Forex Forecast - 5th to 9th June 2017