Forex - EUR/USD weekly outlook: August 26 - 30

Investing.com - The euro pushed higher against the dollar on Friday after data showing that U.S. new home sales fell in July dampened expectations that the Federal Reserve may start to phase out stimulus measures in September.

EUR/USD hit session highs of 1.3410, before trimming gains to settle at 1.3377, 0.17% higher for the day and ending the week 0.33% higher.

The pair is likely to find support at 1.3322, the low of August 20 and resistance at 1.3426, the high of August 21.

The Commerce Department said new home sales fell by a larger-than-forecast 13.4% in July, the largest decline in more than three years.

The data came amid ongoing speculation over whether the Fed will start to scale back its USD85 billion-a-month asset purchase program as soon as next month.

The minutes of the Fed’s July meeting showed that officials were "broadly comfortable" with plans to reduce asset purchases, but divisions over the timing of possible tapering remained, with almost all committee members agreeing that a change in the purchase program was not yet appropriate.

The minutes also described recent U.S. economic data as “mixed “, indicating that plans to taper could be pushed back if the economy was to weaken.

The euro was boosted after European Central Bank policymaker Ewald Nowotny said Friday he did not see many arguments for a rate cut.

The comments came after euro zone PMI data earlier in the week indicated that the region’s economy is continuing gain momentum. 

A report on Friday showed that German economic growth was revised up to 0.7% in the second quarter. Another report compiled by the European Commission showed that its index of consumer confidence rose to a two-year high of minus15.6 from minus 17.4 in July.

In the week ahead, investors will be looking ahead to revised data on U.S. second quarter growth, as well as reports on the housing sector and consumer confidence.

Markets will also be closely watching reports on German business climate and German consumer climate.

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

Monday, August 26

The U.S. is to publish official data on durable goods orders, a leading indicator of production.

Tuesday, August 27

The Ifo institute is to release a report on German business climate, a leading indicator of economic health.

The U.S. is to publish private sector data on house price inflation as well as a closely watched report on consumer confidence.

Wednesday, August 28

Germany is to release the Gfk report on consumer climate, a leading indicator of consumer spending.

Later Wednesday, the U.S. is to release private sector data on pending home sales.

Thursday, August 29

Germany is to release data on the change in the number of people unemployed, as well as preliminary data on consumer price inflation. Elsewhere in the euro zone, Italy is to hold an auction of government bonds.

The U.S. is to publish revised data on second quarter gross domestic product, the broadest indicator of economic activity, as well as the weekly report on initial jobless claims.

Friday, August 30

The euro zone is to publish preliminary data on consumer price inflation, in addition to data on the unemployment rate.

The U.S. is to round up the week with a report on manufacturing activity in Chicago and revised data from the University of Michigan on consumer sentiment, as well as reports on personal income and personal spending.