FUNDAMENTAL OVERVIEW USD:The US dollar has been losing ground ever since the NFP report got released. This happened mainly because the market focus was not on the NFP report, but on the CPI. The market pays attention to the data that the central bank is focused on, and the Federal Reserve is currently focused on inflation. Today, we get the US PPI report and although it might be market-moving, the US CPI due tomorrow remains the key event ahead of the FOMC decision next week. A soft or in-line CPI will likely weaken the dollar as Fed’s Waller mentioned that he won’t consider a rate hike unless we get a hot CPI. Conversely, an upside surprise in core monthly inflation data will likely trigger another rally on a hawkish repricing. Keep in mind that the market is also focused on the Iran war and the surging oil prices as they add upside inflation risks. For this reason, the CPI reaction might not even be as straight-forward as expected, so traders might want to use a lower position size. EUR:On the EUR side, the ECB is widely expected to hike interest rates by 25 bps today, bringing the policy rate to 2.50%. The central bank is expected to retain a data-dependent, meeting-by-meeting approach and Lagarde isn’t seen explicitly pre-committing to another hike.We also get the macroeconomic projections where growth forecasts are expected to be revised higher, while near-term inflation might be revised lower. Markets are currently pricing around 48bps of tightening by year-end and 85bps by the end of 2027. This means traders expect the ECB to hike at least three times by December 2027, including today's increase.That is a significant amount of tightening already embedded in the curve. Therefore, the risks for the euro are skewed to the downside, as the ECB will need to "outhawk" market's expectations to trigger a hawkish repricing and give the euro a boost.A 25bps hike followed by a cautious Lagarde would be taken as more dovish and weigh on the euro, as the rate hike bets would get pared back. If Lagarde emphasizes that the ECB is prepared to continue hiking should inflation risks persist, the euro could see some upside as it would signal more "appetite" for further tightening. EURUSD TECHNICAL ANALYSIS – DAILY TIMEFRAMEOn the daily chart, we can see that EURUSDhas been slowly edging higher after bouncing from the 1.1560 support. The natural target for the buyers is the 1.1711 high, and they will need to break above that to open the door for a rally into the 1.1850 level next. The sellers, on the other hand, will likely step in around those levels with a defined risk above to position for a drop into the 1.14 support. EURUSD TECHNICAL ANALYSIS – 4 HOUR TIMEFRAMEOn the 4 hour chart, the swing high around the 1.1661 is going to be key as that’s when Warsh delivered his hawkish speech. We can expect the sellers to step in around the swing high with a defined risk above it to position for a drop into the 1.1560 support. The buyers, on the other hand, will want to see the price breaking higher to increase the bullish bets into the1.1711 level next.EURUSD TECHNICAL ANALYSIS – 1 HOUR TIMEFRAMEOn the 1 hour chart, we have an upward trendline defining the bullish momentum. If we get a pullback, we can expect the buyers to lean on the trendline with a defined risk below it to keep pushing into new highs. The sellers, on the other hand, will look for a break lower to pile in for a drop into the 1.1560 support next. The red lines define the average daily range for today.UPCOMING CATALYSTSToday, we have the ECB rate decision, the US PPI report and the US Jobless Claims figures. Tomorrow, we conclude the week with the US CPI report. This article was written by Giuseppe Dellamotta at investinglive.com.