The upcoming week promises to be informative and volatile. In the United States, key labor market data, the ISM manufacturing index, and the consumer confidence indicator will be published. In Europe, inflation data for Germany and the Eurozone will be released. Additionally, throughout the week, many Federal Reserve representatives will speak, sharing their positions regarding the prospects for monetary policy easing.

Ultimately, geopolitical events will shape trading sentiment, particularly amid rumors that the Pentagon is preparing for a ground operation in Iran. All of this indicates that the EUR/USD pair will again find itself in a zone of price turbulence.

Monday

During the European trading session, key inflation growth data will be published in Germany. According to forecasts, key indicators are expected to accelerate sharply. Specifically, the overall consumer price index is expected to jump to 1.1% month-on-month in March, up from 0.2% previously. Year-on-year, the figure should also show substantial growth—from 1.9% to 2.6%—amid the energy crisis and sharp increases in energy prices. The harmonized consumer price index (EU Harmonised) is also expected to accelerate, rising from 2.0% to 2.4%.

If the report comes in at the forecast level (not to mention the "green zone"), EUR/USD buyers will receive some support, as German inflation data typically correlates with similar indicators across the Eurozone (set to be published the following day).

Additionally, on Monday, Federal Reserve Chairman Jerome Powell is expected to deliver a speech. He will participate in a moderated discussion at Harvard University. It is worth noting that following the March meeting, Powell delivered a moderately hawkish tone, stating that the central bank would not lower interest rates until it sees progress in slowing inflation. The Fed did not discuss the possibility of tightening monetary policy (unlike the European Central Bank, which acknowledged the possibility of raising rates). If Powell tightens his rhetoric in his speech, the dollar could significantly strengthen its position across the market, including against the euro. However, this is an unlikely scenario; it is more probable that Powell will simply reiterate previously stated points.

Tuesday

On Tuesday, China will release the March manufacturing PMI. Most analysts (including ING and Bloomberg) expect this index to return to the expansion zone. Over the past two months, the index has declined, reaching 49.0 in February. However, for March, an increase to 50.2 is anticipated. It is important to note that March is traditionally considered a strong month for the Chinese industry (following the holiday lull in February and the activation of the construction sector), so the stated result should not be seen as "sensational." Nonetheless, a positive reading could indirectly support the euro by boosting risk appetite.

During the European trading session on Tuesday, we will receive the March inflation growth data for the Eurozone. An acceleration in overall CPI is expected, while core inflation is expected to stagnate. Specifically, the overall consumer price index should rise to 2.5% year-on-year (up from the previous 1.9%)—the highest level since January of last year. The core CPI, excluding energy and food prices, is expected to remain stable at 2.4% in March. As mentioned above, the European Central Bank did not rule out a tightening of monetary policy at the March meeting "if inflation shows sustained growth." Therefore, this report will be evaluated by traders in light of the central bank's stated position. If both overall and core inflation demonstrate an upward dynamic, the euro will receive significant support.

During the US trading session on Tuesday, JOLTS data for February will be published. In the previous month, the number of job openings increased slightly to 6.95 million, after a record drop to 6.55 million in January. A decline to 6.9 million is expected for February. Such a result will be interpreted by the market as a sign of further cooling in the US labor market. For dollar bulls, it is essential that the figure does not return to January's level or drop below it.

Additionally, the Conference Board's consumer confidence index will be released in the US on Tuesday. A negative dynamic is anticipated for March: most analysts expect the index to drop to 88.0, the lowest level since April of last year. Such a grim result will reflect the extremely painful reaction of American households to the events in March. Special attention should be given to the sub-index of Expectations—if it falls below the critical level of 80.0 (and remains there), the dollar will come under pressure as this becomes a classic precursor to a recession in the next 6-12 months.

In addition, three Fed representatives will speak at once on Tuesday: Austan Goolsbee, Michael Barr, and Michelle Bowman.

Wednesday

In China, the Caixin Manufacturing PMI, which focuses on the private sector and small export enterprises, will be released. It is expected to remain in the expansion zone, albeit slightly declining from 52.1 to 52.8. If this indicator of manufacturing activity shows positive dynamics (contrary to expectations of a decline), it could provide additional indirect support for the euro by boosting risk sentiment.

However, the most important macroeconomic reports for EUR/USD on Wednesday will come from the United States.

First, the ADP market labor report will be released in the US, serving as a barometer ahead of the official data release. Although the figures do not always correlate, ADP can provoke volatility. It's worth noting that even this month's forecast is weak—only 42,000 jobs are expected (after a 60,000 increase in February). This is a weak result, but if the actual figure turns out to be negative, contrary to expectations, the dollar will come under significant pressure.

Second, we will review the US February retail sales data. Overall retail sales are expected to increase by 0.4%, following a 0.2% contraction last month. Excluding auto sales, this figure should rise by 0.3% after January's zero growth.

Third, the ISM manufacturing index will be published in the US, which is one of the key early indicators of economic cycles. In March, this indicator is expected to remain virtually at the previous month's level of 52.3, following an increase to 52.4 in February. However, if the index unexpectedly falls into contraction territory (below the 50-point target), the dollar will face substantial pressure.

Thursday

Thursday is likely the most "empty" day for EUR/USD traders. The only point of interest is the Unemployment Claims report, which will be released during the American trading session. Last week, the number of initial jobless claims rose to 210,000. For the current week, this figure may be nearly at the same level (212,000).

While this would indicate the formation of an upward trend (a second week of growth), such a result would still be acceptable for the greenback. The US dollar will only come under pressure if the figure jumps to 230,000 or above.

Friday

On Friday, all EUR/USD traders' attention will be on the March Non-Farm Payrolls (NFP). Recall that the February result unpleasantly surprised and even shocked market participants: the unemployment rate rose to 4.4%, and the number of employed dropped by 90,000. However, according to Fed Chairman Jerome Powell, such figures appear anomalous and are attributed to force majeure circumstances (healthcare strikes and weather catastrophes).

In this context, the March NFP report is particularly significant, as it will help determine whether February's decline was an isolated incident or signals the onset of a sustained trend.

Most analysts expect the unemployment rate to rise to 4.5% in March. It is important to note that this level is considered a critical psychological and technical threshold. A 0.5% increase in unemployment from the cycle's low is often interpreted as fulfilling the "Sahm Rule," signaling the onset of a recession.

At the same time, non-farm employment is expected to increase by only 56,000 in March. Such a weak "gain" following February's "loss" will likely be viewed by the market as an attempt at stabilization rather than a sign of a return to sustainable growth.

Average hourly earnings are expected to rise to 0.4% month-on-month (after increasing to 0.3% in the previous month). However, in the current environment, an increase in the "wage figure" will not support the greenback: the persistence (acceleration) of wage growth amid weak hiring is a sign of stagflationary pressure.

Conclusions

Judging by forecasts, most key macroeconomic reports in the upcoming week could support EUR/USD buyers through a simultaneous strengthening of the dollar and weakening of the euro. However, this potential is conditional, as in the event of another escalation in the Middle East, the market may again ignore macro data, favoring the safe-haven dollar instead.

From a technical standpoint, the pair is situated on the H4 and D1 timeframes between the middle and lower lines of the Bollinger Bands indicator and below all lines of the Ichimoku indicator, which demonstrates a bearish "Parade of Lines" signal. This suggests a preference for short positions. The first target of the downward movement is the level of 1.1490 (the lower Bollinger Bands line on the four-hour chart). The main target is 1.1450 (the lower Bollinger Bands line on the D1 timeframe).