This week, investors will be closely watching a series of high-impact economic events that could set the tone for currency and equity markets—especially in Europe and the U.S. A full slate of Flash PMI releases from France, Germany, the UK, and the U.S., along with the European Central Bank's Main Refinancing Rate decision, will offer critical insights into economic momentum and central bank policy direction. UK retail sales data on Friday will also provide a key read on consumer activity.
In the backdrop of these upcoming catalysts, EURUSD continues to trade within a bullish structure, supported by strong technical signals and favorable macro sentiment. Meanwhile, European equities are maintaining their lead over U.S. counterparts, with Deutsche Bank pointing to sustained inflows and attractive valuations—even as risks tied to earnings and political uncertainty remain. Together, these dynamics are setting up a pivotal week for market participants.
Overview
This week, investors will be closely watching a series of high-impact economic events that could set the tone for currency and equity markets—especially in Europe and the U.S. A full slate of Flash PMI releases from France, Germany, the UK, and the U.S., along with the European Central Bank's Main Refinancing Rate decision, will offer critical insights into economic momentum and central bank policy direction. UK retail sales data on Friday will also provide a key read on consumer activity.
In the backdrop of these upcoming catalysts, EUR/USD continues to trade within a bullish structure, supported by strong technical signals and favorable macro sentiment. Meanwhile, European equities are maintaining their lead over U.S. counterparts, with Deutsche Bank pointing to sustained inflows and attractive valuations—even as risks tied to earnings and political uncertainty remain. Together, these dynamics are setting up a pivotal week for market participants.
High Impact Economic Events
Thursday 10:15 am (GMT+3) – France: Flash Manufacturing PMI (EUR)
Thursday 10:15 am (GMT+3) – France: Flash Services PMI (EUR)
Thursday 10:30 am (GMT+3) – Germany: Flash Manufacturing PMI (EUR)
Thursday 10:30 am (GMT+3) – Germany: Flash Services PMI (EUR)
Thursday 11:30 am (GMT+3) – UK: Flash Manufacturing PMI (GBP)
Thursday 11:30 am (GMT+3) – UK: Flash Services PMI (GBP)
Thursday 15:15 (GMT+3) – Europe: Main Refinancing Rate (EUR)
Thursday 16:45 (GMT3) – USA: Flash Manufacturing PMI (USD)
Thursday 16:45 (GMT3) – USA: Flash Services PMI (USD)
Friday 09:00 am (GMT+3) – UK: Retail Sales m/m (GBP)
Technical Analysis
The EURUSD has maintained a strong upward trajectory since establishing its low at 1.01772 in early January, with the rally underpinned by both technical confirmation and improving macro sentiment. The initial shift in market tone was identified through a Hammer candlestick formation, suggesting the exhaustion of selling pressure and the potential for a trend reversal.
Subsequently, a failure swing pattern provided further validation of bullish momentum. The higher trough at 1.02099, followed by a breakout above the prior swing high at 1.05326, confirmed the establishment of a higher-high, higher-low structure—key characteristics of a bullish trend.
Adding to the technical conviction, the formation of a Golden Cross—where the 20-period EMA crossed above the 50-period EMA—reinforced the medium-term bullish bias and attracted additional upside participation.
Although the pair has seen a modest pullback, the overall trend remains constructive. Momentum indicators continue to support this view: the Momentum Oscillator remains above the 100 level, and the RSI is holding above the 50 baseline, both of which suggest ongoing buying interest and trend strength.
In summary, the broader setup points to a sustained bullish bias, with any near-term corrections likely to be viewed as opportunities to re-enter in alignment with the prevailing trend.
Potential Upside Targets
Should the bulls maintain market control, traders may direct their attention toward the four potential resistance levels below:
1.18294: The initial resistance is 1.18294, representing the daily high reached on July 1.
1.19981: The second price target is identified at 1.19981, corresponding to the 161.8% Fibonacci Extension drawn from the high point, 1.18294, to the low point, 1.15564.
1.22711: The third target is established at 1.22711.
1.27128: An additional price target is estimated at 1.27128, which corresponds to the 423.6% Fibonacci Extension drawn from 1.18294 to 1.15564.
Potential Downside Targets
Should the sellers take market control, traders may consider the four potential support levels listed below:
1.16332: The first level of support is identified at 1.16332, representing the weekly Pivot Point, PP, calculated using the standard methodology.
1.15564: The second support level is identified at 1.15564, corresponding to the daily low marked on July 17.
1.14458: The third support level is 1.14458, reflecting the low point from June 19.
1.13803: An additional downward target is observed at 1.13803, corresponding to the weekly support, S3, calculated using the standard Pivot Points methodology.
Fundamentals
European stocks have been doing better than U.S. stocks this year, and according to Deutsche Bank, this trend could continue for some time. The bank started the year favoring European investments over U.S. ones—and that strategy has paid off. However, with global trade tensions easing, they're now taking a more balanced view.
Investor interest in European markets has grown, especially after strong performance and new government spending plans across Europe. Some major investment firms are even putting more money into European stocks for the long run.
While momentum has slowed a bit, Europe is still seeing more consistent investment than the U.S., where fund inflows have dropped more sharply. One reason for Europe's appeal is that stocks there are still relatively cheap compared to bonds—offering a 4.2% premium—while the U.S. stock market currently offers no such premium.
Deutsche Bank also notes that European politics have become more stable, particularly in Germany, which helps market confidence. That said, political tensions in France and the UK remain a concern.
Europe may also be less vulnerable to trade tariffs than the U.S., which could help its economy if a new EU trade deal goes through.
Still, there are some challenges. A weaker U.S. dollar makes it harder for European companies to earn profits abroad, and while earnings growth is slowing in the U.S., it's still better than Europe's.
In short, European stocks look more attractive than they have in years, but investors should stay aware of political risks, currency impacts, and global earnings trends.
Conclusion
As a wave of high-impact data and central bank decisions approaches, markets are entering a critical stretch. The EURUSD remains technically supported, with strong momentum indicators backing the bullish case. Meanwhile, European equities continue to draw long-term interest, thanks to attractive valuations, improving political stability, and favorable financial conditions.
However, risks tied to earnings, currency dynamics, and geopolitics shouldn't be ignored. For traders and investors alike, this week's events could shape near-term market direction and offer important clues on where opportunity—and caution—may lie going forward.