Forex - EUR/USD weekly outlook: June 17 - 21

Investing.com - The euro slipped lower against the dollar on Friday, paring back the week’s gains following the release of weaker-than-expected U.S. economic data.

EUR/USD hit highs of 1.3389 on Thursday, the pair’s highest since February 20; the pair subsequently consolidated at 1.3344 at the close on Friday, down 0.24% for the day and trimming the week’s gains to 1.16%.

The pair is likely to find support at 1.3277, Thursday’s low and resistance at 1.3454, the high of February 14.

The dollar weakened against the other major currencies last week amid growing expectations that the Federal Reserve will begin to taper its USD85 billion-a-month bond purchasing program later this year.

The dollar found some support on Friday after a series of weaker-than-expected U.S. economic data releases raised concerns over the outlook for the economic recovery ahead of this week’s upcoming Federal Reserve policy meeting.

Data showed that the University of Michigan’s consumer sentiment index fell unexpectedly in the current month after rising to the highest level in almost six years in May.

Separate reports showed that U.S. industrial production was flat in May, while the capacity utilization rate fell unexpectedly last month.

In the euro zone, official data showed that consumer inflation in the bloc remained unchanged at 1.4% from a year earlier in May.

In the coming week, markets will be focusing on Wednesday’s Federal Reserve policy meeting, as investors look to Fed Chairman Ben Bernanke for any indication on when the U.S. central bank may start to unwind its easing policies.

Elsewhere, the euro zone is to release data on manufacturing and service sector activity, while the ZEW index of German economic sentiment will also be closely watched.

Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets. The guide skips Friday as there are no relevant events on this day.

Monday, June 17

The U.S. is to publish the Empire state manufacturing index.

Also Monday, finance ministers and central bankers from the G8 group are to hold the first day of a two day summit in Northern Ireland.

Tuesday, June 18

The ZEW Institute is to release its closely watched report on German economic sentiment, a leading indicator of economic health, as well as data on economic sentiment in the wider euro zone.

The U.S. is to release official data on building permits, housing starts and consumer price inflation.

Meanwhile, finance ministers and central bankers from the G8 group are to hold the second day of a two day summit in Northern Ireland.

Wednesday, June 19

The Federal Reserve is to announce its federal funds rate and publish its rate statement. The statement is to be followed by a closely watched press conference with Chairman Ben Bernanke. The U.S. central bank is also to release its quarterly report on economic and inflation projections.

Thursday, June 20

The euro zone is to release preliminary data on manufacturing and service sector activity. France and Germany are also to publish individual reports. In addition, Germany is to produce data on producer price inflation.

The U.S. is to release the weekly government report on initial jobless claims, in addition to data on existing home sales and the Philly Fed manufacturing index.