EUR & CHF Weekly Forecast (May 25 – 29)

The euro and franc found themselves in the red as risk-taking picked up in the previous week. What’s coming up next?

Only low to mid-tier reports are on this week’s docket for both European currencies, so the focus might stay on overall market sentiment.

Here are the potential catalysts to watch out for:

ECB head Lagarde’s speech (May 27, 8:30 am GMT)

• Head of the central bank is due to speak about the ECB’s response to the coronavirus at the European Youth Event 2020
• Optimistic remarks on the Franco-German recovery plan might keep the shared currency supported
• Lagarde’s speech comes after the release of the ECB Financial Stability Review on May 26, 2:00 pm GMT
• Updates on the Pandemic Emergency Purchase Program are also expected, with speculations for an increase of 200-250 billion EUR next month

Mid-tier euro zone data

• German preliminary CPI (May 28) to tick 0.1% higher after previous 0.4% gain
• German import prices (May 29, 7:00 am GMT) to show 1.5% drop after earlier 3.5% slump
• German retail sales (May 29) to take 10.0% hit in April
• French consumer spending (May 29, 7:45 am GMT) and CPI likely to print dips as well
• Eurozone flash headline CPI (May 29, 10:00 am GMT) to come in at 0.4% and core CPI to hold steady at 0.9%

Low-tier Swiss data

• Trade balance due May 26, 7:00 am GMT
• Credit Suisse Economic Expectations index (May 27, 9:00 am GMT) to dip from earlier 12.7 reading
• KOF Economic Barometer (May 29, 8:00 am GMT) to improve from 63.5 to 70.2

Overall risk appetite

• Market watchers are still keeping tabs on the COVID-19 pandemic, with stronger reactions to positive developments like quarantine measures being eased or vaccine trials going well
• Tensions between the U.S. and China also impact risk sentiment, along with brewing conflict in Hong Kong

Technical snapshot

• Short-term moving averages signal that the majority of EUR pairs are in bullish but weakening territory.

• Only EUR/AUD and EUR/NZD are in the bearish region.
• Stochastic shows that EUR/JPY and EUR/GBP might also see a return in selling pressure as both pairs are overbought.

• Franc pairs are also looking mixed, based on moving averages.
• The 50 MA suggests that most pairs are bullish, but the longer-term 200 MA is giving off bearish signals.

Missed last week’s price action? Read the EUR & CHF price recap for May 18 – 22!