EUR/USD Weekly Forecast: ECB Meeting, Eurozone GDP, and Inflation

Weekly Macroeconomic Outlook

The EUR/USD pair is expected to see increased volatility this week as market focus shifts from geopolitical speculation to significant macroeconomic releases. While recent trading has been dominated by Middle Eastern tensions, the impact of these factors appears to be diminishing, allowing fundamental data to regain influence over price action. Traders are now looking toward the upcoming ECB meeting and critical growth data to determine the next directional move.

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Thursday marks the most critical day for the Eurozone, with the release of the first estimate for Q1 2026 GDP and the April consumer price index. Economic forecasts suggest quarterly GDP may grow by 0.2%, with inflation potentially accelerating from 2.6% to 2.9%. These figures, along with the German unemployment rate, will provide a comprehensive view of the region's economic health and price stability.

Central Bank and Geopolitical Drivers

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The European Central Bank is widely expected to keep its three key interest rates unchanged during its upcoming meeting. While there were initial rumors of tightening in April, recent stabilization in US-Iran relations has led several monetary committee members to signal a pause. The ECB is likely to maintain a cautious stance as it evaluates whether energy prices will stabilize or trigger further inflationary pressure.

Geopolitical developments remain a background factor, particularly the ongoing negotiations involving Washington and Tehran. The ECB's future policy path depends heavily on whether these conflicts move toward a resolution or enter a prolonged freeze. Simultaneously, the market will be weighing the results of the Federal Reserve meeting and a series of high-impact economic reports from the United States.

Technical Analysis and Price Levels

Technical indicators show an average volatility of 58 pips over the last five trading days, which is considered moderate for the pair. For Monday, the expected trading range is established between 1.1664 and 1.1780. Although the upper linear regression channel has turned downward—suggesting a bearish shift—the broader 2025 upward trend remains a potential factor if macroeconomic data supports the Euro.

Short-term momentum indicators currently signal a potential downward pullback. The CCI indicator has entered overbought territory and formed a bearish divergence, which often precedes a corrective move. Resistance is currently identified at 1.1719 (R1) and 1.1780 (R2), while immediate support levels are found at 1.1658 (S1) and 1.1597 (S2).

Trading Recommendations

The long-term outlook for EUR/USD remains generally positive as the US Dollar loses its primary growth drivers. However, short-term positions should be managed according to current technical indicators and the moving average. If the price remains below the moving average, short positions may be considered with technical targets at 1.1664 and 1.1658.

Conversely, maintaining a position above the moving average line keeps long positions relevant, with upward targets set at 1.1780 and 1.1841. As the market distances itself from geopolitical noise, fundamental data from the ECB and the Fed will become the primary catalysts for trend continuation or reversal.

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