FUNDAMENTALOVERVIEWUSD:The US dollar continues to be supported following the hawkish Fed dot plotlast week as the central bank’s tightening bias led to a hawkish repricing ininterest rate expectations. As a reminder, the Fed delivered a hawkish surprise by projecting a ratehike this year (the consensus was for no cuts or hikes). The market increasedrate hike bets with now 38 bps of tightening priced in by year-end. There's a 32%chance of a hike already in July and 68% probability of a move in September.The economic data and financial markets will now guide the Fed as Warshstated that “financial markets perform best when they react to incoming dataand are less efficient when they have to ask how the Federal Reserve will reactto the incoming data”. He added that “financial markets are the most importantsource of information to guide the central bank”.Trump also posted on Truth Social and, unlike his usual stance under FedChair Powell, did not object to the Fed’s decision. In fact, he said that “ratehikes could happen,” which sounds like a green light for Warsh and the Fed todo whatever they deem necessary.The signal is that the Fed is finally looking to deliver on its pricestability mandate and bring inflation back to the 2% target that it’s beenmissing since 2021. If the data says they need to hike, they will. Thisshould keep supporting the greenback until the next set of economic data.EUR:On the EUR side, the ECB ismaintaining the tightening bias, but all the rate hikes have been already pricedin a long time ago. The central bank is now taking a pause at least untilSeptember to see how the economic data evolves over the summer. The market ispricing in 28 bps of tightening by year-end with the next hike coming inSeptember at the earliest. The Eurozone Flash PMIsyesterday showed unsurprisingly the rate of inflation easing to the slowest pacesince February, just before the US-Iran conflict began. While economic activityremains subdued, the downward pressure eased and we might see more improvementin the next months. If the ECB continues to hike, that could weigh on theeconomy further. EURUSD TECHNICALANALYSIS – DAILY TIMEFRAMEOn the daily chart, we cansee that EURUSD broke below a key supportzone around the 1.14 handle opening the door for a drop towards the 1.10 handlenext. If we get some soft US data in the next weeks, we can expect a pullbackinto the downward trendline. If the price gets there, we can expect the sellersto lean on the trendline with a defined risk above it to keep targeting newlows. The buyers, on the other hand, will look for a break to extend the rallyinto the 1.18 handle next.EURUSD TECHNICALANALYSIS – 4 HOUR TIMEFRAMEOn the 4 hour chart, there’snot much we can glean from this timeframe, so we need to zoom in to see somemore details.EURUSD TECHNICAL ANALYSIS – 1 HOUR TIMEFRAMEOn the 1 hour chart, we have a minor downward trendline defining thebearish momentum. If we get a pullback, we can expect the sellers to lean onthe trendline with a defined risk above it to keep pushing into new lows. Thebuyers, on the other hand, will look for a break to extend the pullback intothe 1.1520 level next. The red lines define the average daily range for today. UPCOMING CATALYSTSTomorrow, we get the USJobless Claims data and the US PCE report. On Friday, we conclude the week withthe final University of Michigan consumer sentiment survey. This article was written by Giuseppe Dellamotta at investinglive.com.