Forex - EUR/USD weekly outlook: April 22 - 26

The euro gave up gains to end the day flat against the dollar in a volatile session on Friday after Japan avoided criticism from the Group of 20 nations over its aggressive monetary easing policies.

EUR/USD hit session highs of 1.3129, before erasing gains to settle at 1.3050, 0.1% lower for the day and almost unchanged for the week.

The pair is likely to find support at 1.3000, Wednesday’s low and resistance at 1.3128, Friday’s high.

The euro hit session highs against the dollar after European Central Bank Council member Jens Weidmann said the bank would only cut interest rates if economic data worsened.

The euro fell more than 1% against the dollar on Wednesday after Weidmann said in an interview with the Wall Street Journal that the ECB could adjust monetary policy if economic data warranted it.

On Tuesday, the International Monetary Fund said continued monetary stimulus by the Federal Reserve and the Bank of Japan was expected to continue to support growth in the U.S. and Japan, while the euro zone still posed the greatest threat to a recovery in the global economy.

The single currency rallied against the broadly weaker yen on Friday after finance ministers from the Group of 20 nations indicated that they support Japan’s efforts to spur growth through aggressive monetary easing policies.

"Japan's recent policy actions are intended to stop deflation and support domestic demand," the G-20 said.

EUR/JPY hit session highs of 130.25 before settling at 129.90, up 1.4% for the day and 2.72% higher for the week.

In the week ahead, investors will be awaiting Friday’s U.S. data on first quarter growth amid worries that the U.S. economic recovery is losing momentum.

Markets will also be closely watching euro zone data on manufacturing and service sector activity amid concerns over the outlook for first quarter growth.

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

Monday, April 22

The U.S. is to release private sector data on existing home sales, a leading indicator of demand in the housing market.

Tuesday, April 23

The euro zone is to release data on manufacturing and service sector activity across the currency bloc, while Germany and France are to release individual reports.

The U.S. is to produce official data on new home sales as well as preliminary data on manufacturing activity.

Wednesday, April 24

In the euro zone, Germany and Italy are to hold auctions of 10-year government bonds. Meanwhile, the Ifo Institute is to release a report on German business climate, a leading economic indicator.

The U.S. is to release government data on durable goods orders, a leading indicator of production, as well as data on crude oil inventories.

Thursday, April 25

Spain is to publish official data on the unemployment rate, a leading economic indicator.

The U.S. is to produce the weekly government report on initial jobless claims later in the trading day.

Friday, April 26

The U.S. is to round up the week with preliminary data on first quarter growth, the broadest indicator of economic activity and the leading measure of the economy’s health.

The U.S. is also to release revised data from the University of Michigan on consumer sentiment and inflation expectations.

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