EURUSD: German ZEW Economic Sentiment and GDP figures are thehighlights of this week

 A reversal of its past week decline could occur if it fails to follows through on its current bearishness. This will open up further upside risk towards the 1.3242 level in the new week. 

German ZEW Economic Sentiment and GDP figures are the highlights of this week.  Here is an outlook on the events and an updated technical analysis for EUR/USD, now on lower ground.

1. Eurogroup Meetings: Monday. Eurogroup meetings will be held in Brussels, attended by the Eurogroup President, Finance Ministers from euro area member states, the Commissioner for economic and monetary affairs, and the President of the European Central Bank. They will discuss the Cypriot rescue package and the ways to strengthen the EU’s monetary union to prevent the recurrence of a future financial crisis.
2. German Final CPI: Tuesday, 7:00. German monthly inflation rate was in line with predictions, rising 0.5% in March, following the same figure in the previous month. Meanwhile the annual inflation in March increased at a two- year low of 1.4%, below the 1.5% rise in February. A decline of 0.5% is expected now. Low inflaiton in Germany was certainly one of the triggers for the rate cut.
3. German ZEW Economic Sentiment: Tuesday, 10:00. The ZEW Economic Sentiment survey revealed that the economic climate plunged in April, due to rising pessimism on future economic conditions. The reading fell 12.2 points to 36.3, while expected a milder decline to 42 points. All in all, financial market forecasts remain confident but are less optimistic than they have been in the previous month. A rise to 40.7 is estimated. Economic predictions for the Eurozone continued to worsen in April, dropping to 24.9 from 33.4 in the preceding month, while analysts expected a smaller decline to 31.5 points. An improvement to 27.3 is expected now
4. Industrial Production : Tuesday, 10:00. Industrial output in the euro zone edged up more than expected in February, rising by 0.4% from a 0.6% decline in January. Economists expected the index to rise by 0.3%. The monthly indicator is volatile; however the yearly measure shows industry continues to suffer from the region’s fiscal crisis. A gain of 0.6% is predicted now. Germany’s industrial production was a positive surprise.
5. ECOFIN Meetings: Tuesday. Economic and Financial Affairs Council (ECOFIN), composed of Finance Ministers from EU member states.  The Council meets monthly to discuss budgetary issues.  The committee will try to reach an agreed framework for the recovery and resolution of credit institutions and investment firms. This plan is part of a broader plan to establish a banking union.
6. GDP figures: Wednesday: France begins at 5:30, Germany at 6:00, Italy at 8:00 and the euro-zone at 9:00. The Eurozone experienced its third consecutive quarter of decline at the end of 2012 amid weaker exports in Germany and France, deepening the regional recession and pushing unemployment to record highs. GDP in the Eurozone contracted by 0.6% after a 0.1% decline in the third quarter, worse than the  0.4% drop anticipated by analysts. The state of the region’s biggest economies Germany, France, Italy and Spain worsened compared to the third quarter. Germany contracted 0.6% from 0.2% expansion in the previous quarter, France’s economy shrank by 0.3% and Italian economy plunged 0.9% from 0.2% decline in the third quarter. Overall demand has weakened due to austerity measures prompting households and businesses to cut their spending. France is expected to contract by 0.1%, Germany is expected to expand by 0.3%, Italy is predicted to contract by 0.4% and the Eurozone is anticipated to contract by 0.1%.
7. French Non-Farm Payrolls: Thursday, 7:45. French non-farm payrolls declined in the last quarter of 2012, down 0.2%, from a -0.3% drop in the preceding quarter. The reading was in line with market expectations. A decline of 0.3% is anticipated.
8. Inflation data: Thursday, 10:00. The inflation rate declined in the Eurozone for the second consecutive month in March, reaching 1.7% from 1.8% in February. The lowest annual inflation was registered in Greece, with an inflation rate of minus 0.2%. CPI is expected to increase by 1.2% (like the initial read) and Core CPI is predicted to gain 1.0%