Forex - EUR/USD weekly outlook: April 8 - 12

The euro rose to two-week highs against the dollar on Friday after weaker-than-forecast U.S. nonfarm payrolls data for March added to concerns that the economic recovery in the U.S. may be losing traction.

EUR/USD hit session highs of 1.3039, the pair’s highest since March 25 before settling at 1.3004, 0.53% higher for the day and up 1.19% for the week.

The pair is likely to find support at 1.2899, Friday’s low and resistance at 1.3106, the high of March 15.

The Department of Labor said the U.S. economy added 88,000 jobs last month, the smallest increase since last June and far below forecasts for an increase of 200,000. The U.S. unemployment rate ticked down to 7.6% from 7.7% in February.

The report came after disappointing data on U.S. manufacturing and service sector activity and private sector job creation earlier in the week.

In the euro zone, official data showed that retail sales across the currency bloc fell 0.3% in February from the previous month and were 1.4% lower year-on-year. 

The weak data underscored concerns over the deteriorating economic outlook for the region. 

The euro touched four-month lows against the dollar on Thursday after European Central Bank President Mario Draghi said the bank was ready to act to cut rates if needed.

Draghi said weak economic activity in the region had extended into the early part of this year, but added that a gradual recovery should take hold in the second half of the year.

The comments came after the ECB left rates on hold at 0.75%.

In the week ahead, investors will be awaiting Wednesday’s minutes of the Federal Reserve’s March policy meeting, amid speculation over when the central bank may begin to wind down its asset purchase program.

Market participants will also be watching data on industrial production from Germany and the euro zone 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 8

In the euro zone, Germany is to produce official data on industrial production, a leading economic indicator.

Tuesday, April 9

Federal Reserve Chairman Ben Bernanke is to speak; his comments will be closely watched for indications of the future possible direction of monetary policy.

Wednesday, April 10

In the euro zone, France is to publish official data on industrial production.

The Federal Reserve is to publish the minutes of its most recent policy meeting. The minutes give investors important insights into economic conditions from the bank’s perspective. 

The U.S. is also to release government data on the federal budget balance.

Thursday, April 11 

The ECB is to release its monthly bulletin, which outlines the economic outlook from the bank’s perspective. Meanwhile, Italy is to hold an auction of 10-year government bonds.

The U.S. is to publish the weekly government report on initial jobless claims and official data on import prices.

Friday, April 12

The U.S. is to round up the week with official data on retail sales, producer price inflation and business inventories, as well as preliminary data from the University of Michigan on consumer sentiment. 

Also Friday, Fed Chairman Ben Bernanke is to speak; his comments will be closely watched for indications of the future possible direction of monetary policy.

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