The upcoming trading week will be marked by U.S. inflation data. During the week, we will see CPI and PPI growth figures, the University of Michigan Consumer Sentiment Index, the Inflation Expectations Index (calculated by the same university), and the Import Price Index. These are key indicators of inflation in the U.S. — only the core PCE index, which is due at the end of the month, will be missing from the whole picture.
However, the economic calendar also includes several other events that may stir movement in the EUR/USD pair, which has been drifting within the 70-point range.
Monday
The week will kick off with China's foreign trade data. Export volume in June is expected to rise to 5.0% y/y following a 4.8% increase in the previous month. Imports are also forecast to increase by 1.3% after falling 3.4% in May. If these figures come in at or above forecast, it will indicate:
- Resilient external demand;
- A rebound in domestic demand.
Such results may indirectly support the euro by boosting overall appetite for risk.
Also of potential interest to traders is the monthly Bundesbank report. While hawkish language might support the euro, this report typically has a limited impact on EUR/USD.
Tuesday
This is likely the busiest day of the week for EUR/USD traders.
It starts with China's Q2 GDP figures — a key release that could trigger strong volatility in dollar pairs due to either rising risk-off or risk-on sentiment.
Recall that in Q1, China's economy grew by 5.4%, exceeding most analysts' expectations. Other components of that release also beat forecasts, indicating that stimulus measures were effective, even though quarterly growth was a modest 1.2%.
Preliminary forecasts suggest Q2 GDP will rise 5.1%. This would signal steady but slowing growth in China. A result below 5.0% would suggest stimulus effects were short-lived and shallow, with export risks and weak domestic consumption still unresolved. However, if the data matches or exceeds Q1 figures, EUR/USD bulls will get a strong boost from improved risk sentiment.
During the European session, ZEW indices will be published. A positive trend is expected:
- Germany's economic sentiment index is forecast to rise to 50.8, its best since March.
- This would mark the third consecutive monthly increase.
- The eurozone-wide index is also expected to climb to 37.8.
These results would support the euro, as strong ZEW readings give the European Central Bank more reason to maintain a wait-and-see approach, keeping rates unchanged.
During the U.S. session, one of the most important inflation indicators — the Consumer Price Index (CPI) — will be released. Analysts expect:
- Headline CPI to accelerate to 2.6% y/y from 2.4%.
- Core CPI to rise to 2.9% from 2.8%, breaking a three-month plateau.
In theory, this could support the U.S. dollar. However, the Fed's June meeting minutes (released last week) showed that members consider tariff-driven inflation to be "temporary or limited." Most members are still committed to easing monetary policy. As a result, even a moderate rise in CPI might offer only limited or temporary support for the greenback.
Conversely, if the report disappoints, the dollar could come under heavy pressure, as the odds of a September rate cut would increase.
Key speakers on Tuesday: Fed Governors Michael Barr and Michelle Bowman.
Wednesday
The U.S. will release another important inflation metric — the Producer Price Index (PPI). Forecasts:
- Headline PPI expected to rise from 2.6% to 2.8% y/y.
- Core PPI (excluding food and energy) expected to rise from 3.0% to 3.2%.
This release could either complement or counteract the CPI report, depending on its direction.
Also on Wednesday:
- U.S. industrial production data: expected to increase 0.1% in June after a 0.2% decline in May.
- Volatility may increase only if the reading remains negative, especially since the ISM Manufacturing Index has been in contraction for four straight months.
- The Fed's Beige Book (regional economic review) will also be published — informative, but typically has little market impact.
Thursday
The key macroeconomic report for EUR/USD on Thursday is the U.S. retail sales report for June:
- After a dismal May, analysts expect a rebound:
- Headline sales up 0.2% (vs. -0.9% prior),
- Sales excluding autos up 0.3% (vs. -0.3%).
If results meet forecasts, this would suggest weak but growing consumer activity, which would support the dollar to some extent.
Also on Thursday:
- Weekly jobless claims: Have steadily declined over the past 4 weeks, with the latest reading at 227,000.
- This week's forecast: 234,000.
- If it exceeds 250,000 (June highs), it could weigh on the dollar.
- Import Price Index: Expected to rise 0.7% y/y.
- This will only significantly impact EUR/USD if it aligns with CPI and PPI surprises.
- Philadelphia Fed Manufacturing Index: After two months in negative territory, it is expected at +0.4.
- For dollar bulls, it is important that the index crosses into positive territory, especially if industrial output disappoints.
Friday
On July 18, the final trading day of the week, the University of Michigan Consumer Sentiment Index will be released:
- This index fell from January to April, hitting 52.2, and remained at that level in May.
- In June, it rebounded to 60.7.
- Forecast for July: 61.4, suggesting continued recovery.
Special attention will be on the Inflation Expectations Index from the same university:
- It surged to 6.5%–6.6% in April (a high since 1981),
- Then fell to 5.0% in June.
If expectations rise again in July, it may be seen negatively for the dollar, as fears of stagflation could resurface.
Technical Picture
On the D1 timeframe, EUR/USD is located between the middle and upper Bollinger Bands, closer to the middle band; Above the Ichimoku Kumo cloud, but between the Tenkan-sen and Kijun-sen lines.
This setup lacks clear technical signals. Throughout the week, the pair fluctuated within a narrow 1.1680–1.1750 range, reflecting indecision from both buyers and sellers.
Long positions should only be considered if the pair consolidates above 1.1750 (above the Tenkan-sen on D1), which would trigger a bullish "Parade of Lines" signal on the Ichimoku indicator. The next upside target would be 1.1870 (upper Bollinger Band on D1).
A trend reversal can only be confirmed if bears push below 1.1600 (Kijun-sen line). However, given the current fundamental backdrop, long positions on the pair look more justified, even within the working range of 1.1680–1.1750.
