FUNDAMENTALOVERVIEWUSD:The US dollar has beensupported since the last FOMC decision but as the hawkish repricing reached anear-term peak, the momentum waned as traders shifted their focus to the key USdata.Right now, the market ispricing in a 29% chance of a rate hike in July, which rises to 65% inSeptember. I’m pretty sure we will need notable upside surprises in the data toforce the Fed to hike already in July. September would be the preferred month forthem as they also release the SEP and the dot plot.Given the Fed’s focus oninflation, the US CPI will likely be more important for market pricing unlesswe get a blockbuster NFP report. In line or worse than expected data, shouldlead to a pullback pretty much across the board, with the greenback comingunder pressure from some dovish repricing. On the other hand, upside surprisesshould keep supporting the dollar.EUR:On the EUR side, the recentinflation data showed a welcome easing for the ECB which, coupled with the quickdrop in energy prices to pre-war levels, greatly diminished the urgency forfurther tightening. This is also what policymakers have been communicating viatheir recent speeches which seals a pause in July (unless something really badhappens on the US-Iran/Strait of Hormuz side). The market is still pricingin a 30% chance of a hike in July but that should now stand much lower. There’sa total of 27 bps of tightening still priced in by year-end which suggests themarket is expecting at least another rate hike from the ECB. For now, the data supportsa prolonged pause.EURUSD TECHNICALANALYSIS – DAILY TIMEFRAMEOn the daily chart, we cansee that EURUSD pulled back into the brokensupport zone around the 1.14 handle and started to consolidate awaiting the keyUS data. From a risk management perspective, the sellers will have a betterrisk to reward setup around the downward trendline to position for a drop intothe 1.10 handle next. The buyers, on the other hand, will want to see the pricebreaking higher to open the door for new highs and target the 1.18 handle.EURUSD TECHNICALANALYSIS – 4 HOUR TIMEFRAMEOn the 4 hour chart, we cansee more clearly the rangebound price action around the 1.14 resistance. There’snot much we can glean from this timeframe, but the resistance zone should actas kind of barometer in the short-term with the price staying below it beingmore bearish and above it being more bullish. The data US data will have the finalsay.EURUSD TECHNICAL ANALYSIS –1 HOUR TIMEFRAMEOn the 1 hour chart, there’s not much we can add here but if we get a spikelower on a good NFP report, we might not see much follow through until the USCPI as traders might want to wait for inflation data to confirm whether anearlier than expected rate hike could come, nonetheless, the pair would remainskewed to the downside. On the other hand, if the NFP report comes in line oreven worse than expectations, we will likely see EUR/USD extending the pullbackinto new highs and target the downward trendline next. The red lines define theaverage daily range for today. UPCOMING CATALYSTSToday, we get the US NFPreport and the US Jobless Claims figures. This article was written by Giuseppe Dellamotta at investinglive.com.