The upcoming week promises to be both interesting and informative while also being volatile. The economic calendar is packed with major releases that could trigger heightened volatility not only for the EUR/USD pair but across all dollar-based currency pairs.

Additionally, the U.S. dollar will once again be at the center of political battles following the Senate's approval of Donald Trump's proposed "One Big Beautiful Bill."

Monday

The dollar will find itself in the "eye of the storm" right at the start of trading, as the controversial bill to cut taxes and government spending was approved by the Senate over the weekend (Saturday). However, this is not yet the final decision: senators voted (51 in favor and 49 against) only to begin debates on the 940-page bill, which includes nearly $4 trillion in tax cuts. The next stage (lasting until July 4) involves lawmakers proposing amendments. If the bill is altered (which is virtually certain), it will return to the House of Representatives for final approval. Only then will it reach Trump for signing.

Thus, Saturday's vote was a key procedural step but not the final one.

How will the dollar react? Overall, rising concerns over the fiscal health of the U.S. are weighing on the greenback. Preliminary estimates suggest the bill, if passed, would add about $3.8 trillion to the federal debt over the next decade (currently $36.2 trillion). Political strife could also pressure the dollar, as the bill is being criticized not only by Democrats but by some Republicans. Even Trump's former allies have joined the opposition. For example, Elon Musk called the bill "utterly insane and destructive," saying it would destroy millions of jobs and strategically harm the country.

This Senate decision will undoubtedly be the key market driver on Monday.

Additionally, on Monday, during the Asian session, China is expected to release its manufacturing PMI. Forecasts call for a slight uptick (from 49.5 to 49.6), but the index will remain in contraction. A surprise reading above 50 could boost risk appetite and strengthen the euro across the board, including against the dollar.

During the European session, Germany's inflation report is scheduled for publication. Most analysts expect the headline CPI to rise to 2.3% year-over-year (y/y) in June and the harmonized index to 2.2%. German inflation data often correlates with broader Eurozone data, so an upbeat report would lend further support to EUR/USD bulls.

Tuesday

The key macroeconomic report on Tuesday will be the ISM Manufacturing PMI. The index has been falling for four consecutive months and has remained in contraction territory. It's forecast to inch up from 48.5 to 48.8 in June but remain below 50. The dollar would benefit only if the reading exceeds the 50.0 threshold.

Another release to watch is the JOLTs report (job openings), which is expected to rise from 7.390 million to 7.450 million in May. However, as a lagging indicator, it's unlikely to spark significant volatility in EUR/USD.

In contrast, the Eurozone CPI report could stir the pair. Headline inflation is expected to rise to 2.9% (from 1.9%), while core inflation should remain steady at 2.3%. The European Central Bank has stated that the current easing cycle is ending, though ambiguous wording has left room for interpretation. If inflation picks up—especially above expectations—it could confirm that the ECB has truly ended its rate-cutting cycle.

Also on Tuesday, Fed Chair Jerome Powell and ECB President Christine Lagarde will speak. Powell already addressed Congress last week, so markets aren't expecting surprises—though he may comment on Trump's recent attacks (Trump called him a "total idiot"). Lagarde may comment on the inflation report released earlier in the day, as well as on the better-than-expected PMI and IFO figures.

Wednesday

The ADP employment report will be released, serving as a barometer ahead of Friday's Nonfarm Payrolls. While the numbers don't always correlate, a weak report can move markets. This month's forecast is weak, with an expected increase of +105,000 jobs. A result below 100,000 would increase pressure on the dollar.

The Eurozone's unemployment rate will also be released, expected to remain at 6.2%. Unless there's a surprise, this report will likely be ignored by traders.

Thursday

Typically, Nonfarm Payrolls are published on Friday. However, since July 4 is Independence Day, the report will be released on Thursday instead.

Preliminary forecasts don't bode well for the dollar. Unemployment is expected to rise to 4.3%, the highest level since August 2024. Nonfarm employment is forecast to grow by only 120,000, below the 200,000 target. A figure under 100,000 would alarm dollar bulls. Average hourly earnings are expected to slow to 0.3% month-over-month (m/m) and 3.8% year-over-year (y/y).

Also, on Thursday, the ISM Services PMI will be released. Last month, it unexpectedly fell into contraction at 49.9 (vs. a forecast of 53.2). It's expected to rebound to 50.8. If it remains below 50, the dollar could face renewed and significant pressure.

Friday

The calendar is nearly empty. U.S. markets are closed for Independence Day. The only notable release will be the Eurozone Producer Price Index, which may only confirm earlier inflation trends.

Technicals

Across almost all timeframes (H4 and above), the EUR/USD price sits at or above the middle Bollinger Band or at the upper band. The pair is also trading above all Ichimoku lines, with a bullish "Parade of Lines" signal on both H4 and W1 timeframes. This setup supports long positions. The upside target is 1.1800 (upper Bollinger Band on W1).