FUNDAMENTAL OVERVIEW USD:The US dollar weakened across the board in the past couple of days following the surprisingly soft US inflation figures. The data triggered a dovish repricing in interest rate expectations with traders scaling back significantly the probabilities for a rate hike in July which is now comfortably off the table. The Fed is now expected to raise interest rates in September at the earliest with a fully priced hike in December. The US-Iran crisis in the background is keeping inflation risks skewed to the upside, so the downside in the greenback should remain limited without a clear de-escalation. EUR:On the EUR side, the June inflation data showed a welcome easing for the ECB which coupled with the drop in energy prices, greatly diminished the urgency for further tightening. This is also what policymakers have been communicating via their recent speeches which basically sealed a pause in July. The market is pricing in 43 bps of tightening by year-end with the next hike coming in September at the earliest (80% probability). For now, the data supports a prolonged pause. EURUSD TECHNICAL ANALYSIS – DAILY TIMEFRAMEOn the daily chart, we can see that EURUSDfinally reached the major downward trendline. This is where we can expect the sellers to step in with a defined risk above the trendline to position for a drop into the 1.10 handle. The buyers, on the other hand, will want to see the price breaking higher to open the door for a rally into the 1.16 level next. EURUSD TECHNICAL ANALYSIS – 4 HOUR TIMEFRAMEOn the 4 hour chart, we have an upward trendline defining the correction. If we get a pullback into the trendline, we can expect the buyers to lean on it with a defined risk below it to keep targeting a break above the major trendline. The sellers, on the other hand, will want to see the price breaking below the trendline and the support to increase the bearish bets into new lows.EURUSD TECHNICAL ANALYSIS – 1 HOUR TIMEFRAMEOn the 1 hour chart, we have a minor upward trendline defining the recent bullish move. If we get a pullback into the trendline, we can expect the buyers to lean on it with a defined risk below it to keep pushing into new highs. The sellers, on the other hand, will look for a break to increase the bearish bets into new lows. The red lines define the average daily range for today. UPCOMING CATALYSTSToday, we get the US Retail Sales and Jobless Claims data. Tomorrow, we conclude the week with the University of Michigan Consumer Sentiment survey. The focus will remain on US-Iran headlines. This article was written by Giuseppe Dellamotta at investinglive.com.