The upcoming week may unfold in two fundamentally different ways. The first scenario anticipates an escalation in the Middle East, while the second assumes the maintenance of the current ceasefire. If the United States resumes military action against Iran, risk-off sentiment in markets will intensify sharply, and investor attention will be fully focused on events in the Middle East. In this case, the dollar will strengthen its position across the market, regardless of the economic data released.
However, if, despite numerous insights about the Middle East, the fragile ceasefire holds, the market's focus will shift to the macroeconomic agenda—primarily the key reports we discuss below.
On Monday, China will release data on fixed asset investment for April. This is one of the key indicators of investment activity and the overall state of the Chinese economy. In March and February, this indicator was in positive territory after a four-month protracted decline. This suggests that the worst phase of the investment downturn is likely over, with the effects of stabilization measures beginning to show. After a decline to -3.8%, the figure increased by 1.8% in February and 1.7% in March. Forecasts suggest that fixed asset investment will also rise by 1.7% in April.
Additionally, on Monday, China will publish data on industrial production. Recent reports indicate that the Chinese industry remains resilient, with continued growth dynamics. In particular, industrial production increased by 5.7% year-on-year in March—slightly lower than February's result (6.3%) but above market expectations. Overall, the industrial sector in China continues to expand, with an expected year-on-year growth rate of 6.0% in April.
Should the reports mentioned above meet or exceed forecast levels, or fall into the "green zone," buyers of EUR/USD will receive indirect support from increased interest in riskier assets. However, again, this is only the case if the current status quo in the Middle East remains unchanged, without signs of escalation.
In the United States, data on the volume of pending home sales will be released. This is one of the main leading indicators of the American real estate market, reflecting the number of signed contracts for the purchase of homes and apartments in the secondary market. Recent data indicate that the US housing sector is in a gradual yet unstable recovery. In March, pending home sales rose by 1.5%, continuing a cycle of moderate growth after a weak start to the year. Most analysts expect this indicator to remain in positive territory in April, with pending sales volume expected to increase by 1.2%. Such a result could provide background support for the US dollar.
Also, on Tuesday, the Eurozone's trade balance for March will be published. In February, the trade surplus amounted to €7.0 billion (adjusted for seasonal factors), a significant decline from the previous months, when the surplus was considerably higher (for example, in January, it was €12.1 billion). A further decline in the indicator is expected in March—to €6.5 billion—indicating a gradual, yet steady contraction of the foreign trade surplus and weakening support from net exports.
During the European session on Wednesday, final data on Eurozone CPI growth for April will be published. According to forecasts, the final assessment will match the initial estimate: the overall consumer price index is expected to remain at 3.0%, while the core index will stay at 2.2%. The release is likely to provoke volatility in the EUR/USD pair only if there are significant revisions to the April inflation figures.
During the American session on Wednesday, the FOMC minutes—from the April meeting—will be released. Recall that at the end of that meeting, the central bank maintained all monetary policy parameters unchanged as expected. At the same time, three hawks opposed maintaining the phrase that "the next step is likely to be a cut." Loretta Mester, Beth Hammack, and Neel Kashkari insisted on removing any hints of a possible near-term interest rate cut from the text. Concurrently, Governing Board member Stephen Morris (a protege of Donald Trump) voted for interest rate cuts at the April meeting, citing risks to economic growth.
The tone of the accompanying statement was hawkish. The Fed revised its assessments of inflation progress, stating that the disinflationary process had lost its previous momentum. Furthermore, the Fed abandoned the phrase "balanced risks," indicating that the priority remains on combating inflation. For the markets, this means the central bank views inflationary risks as more significant than the risks of an economic slowdown.
The FOMC minutes could amplify or weaken the "effect of the April meeting." If cautious themes (concerns about economic growth, labor market conditions) prevail in the text, the dollar will come under pressure again, especially against the euro. However, in my opinion, the minutes will likely reiterate the main theses articulated by Powell at the closing press conference. In other words, the central bank will likely focus on inflation and adopt a wait-and-see stance. At the same time, the option of raising rates will not dominate if it is mentioned at all in the text of the minutes.
Thursday is "PMI Day." The Manufacturing Purchasing Managers' Index (PMI) for Germany fell slightly in April (following three consecutive months of growth), but it remained in the expansion zone at 51.4. In May, a downward trend is expected to persist, with analysts forecasting a reading of 51.0. The Eurozone manufacturing index has been rising consistently for the last four months, reaching 52.2 in April. However, a slight decline is expected this month to 51.8. If, against expectations, the manufacturing sector shows a more significant decline and enters the contraction zone, the euro will come under substantial pressure.
The Services PMI for Germany entered the contraction zone in April, dropping to 46.9. The Eurozone services indicator showed a similar trend, ending at 47.6 last month. In May, both indicators are expected to rise slightly (to 47.1 and 47.7, respectively), but will still remain below the 50-point mark. Further deepening into the contraction zone could add additional pressure on the euro.
During the US session, the Unemployment Claims report will be published. Weekly data on initial and continuing jobless claims is one of the most timely indicators of the state of the US labor market, so sharp fluctuations or (especially) the formation of a stable trend can significantly influence EUR/USD. However, initial claims have recently fluctuated between 190,000 and 210,000, remaining at historically low levels. Forecasts suggest that this week the figure will remain within this range (+210,000). The release could impact the pair only if it significantly deviates from the forecast level, either upwards (230,000+) or downwards (especially if initial claims are below the psychologically important level of 200,000).
Additionally, on Thursday, the US manufacturing PMI will be published. Following a sharp spike in April (54.5), a slight decline to 53.6 is expected this month. However, even such a result can support the greenback, as the index will remain in the expansion zone, where it has been since August of last year. The US services PMI is also expected to remain above the 50-point mark, rising to 51.1.
On Friday, Germany will release the IFO indices. Unlike the ZEW indices, which reflect the expectations of financial experts, these indicators are based on a survey of representatives from the real economy. Thus, they allow for an assessment of both the current business conditions and business expectations. According to preliminary forecasts, the business climate index for Germany is expected to decrease again—this time to 84.1 from the previous value of 84.4. This implies a further decline in the IFO amid moderately weak ZEW indices. This might suggest that financial markets' pessimism is outpacing the actual deterioration in the real sector. The current situation assessment index is expected to drop to 85.0, representing the lowest value since February of last year. The IFO economic expectations index is also expected to show a downward trend to 82.6.
Thus, the economic calendar for the upcoming week is not filled with significant releases for EUR/USD traders, but in the context of an informational vacuum, the aforementioned reports could provoke volatility in the pair. However, if Donald Trump indeed decides to resume military operations against Iran, macroeconomic reports will take a back seat—the safe-haven dollar will enjoy increased demand regardless of the dynamics of economic indicators.
From a technical perspective, the EUR/USD pair retains a priority for short positions. On the H4 timeframe, the price is between the average and lower lines of the Bollinger Bands and below all Ichimoku lines, forming a bearish "Parade of Lines" signal. On the D1 timeframe, the price has crossed the lower Bollinger Bands line but remains within the Kumo cloud. The nearest target for the downward movement is 1.1610 (the lower Bollinger Bands line on the four-hour chart). The main target is 1.1570 (the lower Bollinger Bands line on the daily chart).
*এখানে পোস্ট করা মার্কেট বিশ্লেষণ আপনার সচেতনতা বৃদ্ধির জন্য প্রদান করা হয়, ট্রেড করার নির্দেশনা প্রদানের জন্য প্রদান করা হয় না।
ইন্সটাফরেক্স বিশ্লেষণমূলক পর্যালোচনাগুলো আপনাকে মার্কেট প্রবণতা সম্পর্কে পুরোপুরি সচেতন করবে! ইন্সটাফরেক্সের একজন গ্রাহক হওয়ায়, দক্ষ ট্রেডিং এর জন্য আপনাকে অনেক সেবা বিনামূল্যে প্রদান করা হয়।
