The EUR/USD pair turned to the downside in the short term and now is trading at 1.0745 at the time of writing. Technically, the price action signaled exhausted buyers. DXY's rebound forced the greenback to dominate the currency market in the short term.
Fundamentally, the US inflation data and the FOMC represent the most important events of the week. Tomorrow, the Consumer Price Index may report a 0.1% growth in May versus 0.4% growth in April, while Core CPI is expected to register a 0.4% growth. On the other hand, the German and Eurozone ZEW Economic Sentiment indicators could report worse data compared to the previous reporting period. On Wednesday, the FED is expected to keep the monetary policy unchanged.
EUR/USD 1.0733 Key Support!
As you can see on the H1 chart, the EUR/USD pair failed to stay above the 1.0779 former high (upside obstacle) confirming exhausted buyers. You knew from my previous analysis that only a valid breakout above 1.0779, a new higher high would have announced an upside continuation.
Now, it has dropped below the ascending pitchfork's lower median line (lml) which represents a dynamic support. The 1.0733 former low is seen as a key downside obstacle.
EUR/USD Outlook!
Dropping and closing below 1.0733 validates more declines and is seen as a new selling opportunity.
