While most of the attention will be on the US, we get to take a look at the state of the Eurozone this week. This week we see Eurozone CPI which is expected to show inflation coming in at 2.1% for the year.

Remember that most central banks want to see inflation in the 2-3% target band, so the Eurozone still remains at the lower end of that.

The only way we are likely to see rate hikes out of Europe and upwards pressure on the EUR is when inflation starts to creep towards the top end of that range.

Technical Levels

Given the downtrend in the EUR/USD at the moment, 1.1300 has now become the downside target for the week. This was the previous swing low and at the moment it appears to be a matter of if, not when, we take it out.

Should we get a rally, I think support turned resistant at 1.1450 is important and should provide some selling pressure.