EUR/USD Outlook: Central Bank Decisions Set to Drive VolatilityEUR/USDOANDA:EURUSDForexMarketInsightsLast week began with the release of U.S. retail sales data. In March, retail sales rose by 1.7% month over month, exceeding market expectations of 1.1%. On an annual basis, the indicator increased by 4.0%, also well above the forecast of 2.4%. The S&P Global Composite PMI flash estimate for April stood at 52.0, moderately above the expected 49.9. On Friday, the University of Michigan Consumer Sentiment Index final reading for April came in at 49.8, slightly higher than the projected 47.6. Five-year inflation expectations also increased modestly, rising to 3.5% from the previous 3.2%. In Germany, the Producer Price Index for March increased by 2.5% on a monthly basis, while remaining negative year over year at -0.2%. The monthly figure exceeded the market forecast of 0.8%, while the annual figure matched expectations. The ZEW Economic Sentiment Index for April stood at -20.4 in the Eurozone and -17.2 in Germany, with both readings falling short of market estimates. Germany’s S&P Global Manufacturing PMI flash estimate for April was 51.2, in line with expectations, while the same indicator for the Eurozone reached 52.2. Germany’s Ifo Business Climate Index for April came in at 84.4, slightly below the expected 85.4. Currency markets were relatively quiet during the previous week. The EUR/USD pair traded within a narrow range, with the euro remaining under moderate pressure. At the same time, the U.S. dollar received some short-term support from expectations of positive developments in the Strait of Hormuz and falling oil prices. The pair began the week by rejecting the 1.18 resistance level and later moved toward a weekly low of 1.1670, which was also rejected on Friday. The pair closed the week at 1.1722. The RSI declined modestly to 51 during the week but finished at 53. Market participants still appear to view conditions as somewhat overbought rather than oversold. The 50-day moving average crossed below the 200-day moving average and continued to trade beneath it, suggesting a possible shift in trend over the coming period. While the previous week was relatively calm, the week ahead is expected to bring higher volatility. Several important macroeconomic releases are scheduled for both the United States and the Eurozone. Most importantly, the ECB and the Federal Reserve are both set to announce interest rate decisions. Wednesday and Thursday are likely to be particularly sensitive sessions, as market participants assess central bank commentary and adjust positions based on expectations for future macroeconomic conditions. Current technical signals suggest that price action could move in either direction. A move higher would likely bring EUR/USD back toward a test of the 1.18 resistance level. On the downside, a break below 1.1670 would shift attention to 1.1640 and then the 1.16 support area. Key events to monitor this week include Germany’s GfK Consumer Confidence for May, Eurozone Economic Sentiment for April, Germany’s preliminary April inflation rate, German retail sales for March, Germany’s April unemployment rate, flash Q1 GDP growth figures for Germany and the Eurozone, the Eurozone flash inflation rate for April, Eurozone unemployment for March, and the ECB interest rate decision on Thursday, April 30. In the United States, attention will be on preliminary March building permits, durable goods orders for March, housing starts for March, the FOMC meeting and interest rate decision on Wednesday, April 29, the March PCE Price Index, personal income, personal spending, and the ISM Manufacturing PMI for April.