EUR/USD: Inflation cools, ECB in focusEuro vs. US DollarFX:EURUSDXBTFXThe attention of investors at the U.S. market this week was on inflation data. As posted, the inflation rate ended June by dropping 0,4% compared to the previous month, while it holds 3,5% on a yearly basis. Figures came a bit lower from investors expectations of 0% m/m and 3,9% y/y. Core inflation was also below market expectations at 0% m/m and 2,6% y/y. The Producers Price Index in June dropped by -0,3% m/m, below market expectations of 0,1% m/m. Retail Sales in June were higher by 0,2% for the month, still modestly below the forecasted 0,5%. Building permits preliminary in June reached 1.367M, modestly below estimated 1.4M. At the same time Housing Starts in June at the level of 1.427M were above forecasts of 1.2M. The University of Michigan Consumer Sentiment preliminary for July reached 54.4 above estimated 50.4. Five year inflation expectations were without change from the previous estimates, at the level of 3,3%. Wholesale prices in Germany in June dropped by -0,7% for the month, while still holding at 4,9% for the year. Figures were below market estimates. The industrial production in the Euro Zone in May dropped by -0,2% m/m/ and -1,2% y/y. Figures were significantly below market estimates. The most significant weekly event is related to the surprising drop in the U.S. inflation in June. The currency pair reached the highest weekly level at 1,1482 prior to the publication of the inflation figures. Still, the week started at lower grounds, with the minimum weekly level at 1,1373. The week was closed at 1,1439. The RSI is trying to break the 50 level and take the road toward the overbought market side, however, the indicator is still holding around the 47 level. The MA50 continues to diverge from MA200, without an indication over a potential cross in the coming period. For the last few weeks the currency pair has traded rather sideways, then exposing some trading trend. The support line at 1,14 continues to be tested, and it could be expected that the currency pair will stay around this level for another week. The catalyst for a stronger move might come around the FOMC meeting scheduled for the last week of this month. For the week ahead, ECB will discuss interest rates, with current market expectations of no change in rates at this meeting. On the other hand, the week ahead is not bringing any currently important macro data for the U.S. market, in which sense, the sideway trading might continue in a range between 1,14 and 1,15 resistance. Important news to watch during the week ahead are: EUR: Producers Price Index in Germany in June, ZEW Economic Sentiment Index for Germany in July, ECB will hold its regular meeting and discuss interest rates on Thursday, July 23rd, GfK Consumer Confidence in Germany for August, S&P Global Manufacturing PMI flash for July for Germany USD: there is currently no important economic news scheduled for the week ahead for the U.S. market.