Forex - EUR/USD weekly outlook: March 11 - 15

The euro fell to its lowest level in three months against the dollar on Friday after official data showed that the U.S. economy added significantly more jobs than forecast in February.

EUR/USD hit a session low of 1.2956, the pair’s lowest since December 11 before settling at 1.2997, 0.85% lower for the day and down 0.29% for the week.

The pair is likely to find support at 1.2928, the low of December 11 and resistance at 1.3100, the high of March 1.

The Department of Labor said the U.S. economy added 236,000 jobs last month, blowing past expectations for an increase of 160,000. The unemployment rate ticked down to 7.7%, the lowest level since December 2008, from 7.9% in January.

The robust data added to speculation over an earlier-than-expected end to the Federal Reserve’s easing program, bolstering demand for the dollar.

The single currency rallied more than 1% against the dollar on Thursday after less dovish than expected comments from European Central Bank President Mario Draghi at the bank’s post-policy meeting press conference.

Draghi said policymakers discussed a rate cut but the "prevailing consensus" was to leave interest rates unchanged at 0.75%.

Draghi also said that there is evidence that economic weakness has extended into the early part of this year but added that the bank still sees a recovery later this year.

The euro shrugged off a one notch downgrade of Italy by Fitch’s ratings agency on Friday, citing inconclusive elections results and a deepening recession.

In the week ahead, investors will be closely watching U.S. data on retail sales, industrial production and inflation to determine the strength of the economic recovery. Markets will also be eyeing developments in the euro zone.

Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.

Monday, March 11

In the euro zone, France is to produce government data on industrial production. 

Tuesday, March 12

The U.K. is to release official data on manufacturing and industrial production, leading economic indicators, as well as data on the trade balance, the difference in value between imports and exports.
Later in the day, the U.S. is to publish data on the federal budget balance.

Wednesday, March 13

The euro zone is to produce official data on industrial production, while Italy is to hold an auction of 10-year government bonds.

The U.S. is to release government data on retail sales, as well as official data on import prices, business inventories and crude oil stockpiles.

Thursday, March 14

The ECB is to publish its monthly bulletin, which looks at current and future economic conditions from the bank's viewpoint. Meanwhile, European Union leaders are to hold the first day of a two day economic summit.

The U.S. is to release government data on producer price inflation, the leading indicator of consumer inflation and the weekly government report on initial jobless claims.

Friday, March 15

EU leaders are to hold the second day of an economic summit in Brussels. Meanwhile, the euro zone is to publish official data on consumer price inflation, which comprises the majority of overall inflation.

The U.S. is to round up the week with official data on consumer inflation and preliminary data from the University of Michigan on consumer sentiment. The U.S. is also to release data on industrial production, the capacity utilization rate and manufacturing activity in New York state.