EURUSD Testing Trendline Support

EUR Lower Following ECBEURUSD is starting the week on a softer footing as the pair continues to hold near the foot of the recent correction lower. The latest ECB meeting saw the bank hiking rates by a further .25% while leaving the door open to further action if needed. However, the tone of the meeting was far less hawkish with the ECB also noting that it would consider holding rates unchanged. Lagarde acknowledged that the eurozone economy had slowed and noted concerns over the likelihood of further slowing going forward. As such, the market has now scaled back its ECB rate hike projections which is likely to keep EUR pressured near term.US CPI On WatchLooking ahead this week, in the absence of any tier-one eurozone data, EURUSD is likely to be driven more by USD flows. Thursday’s US CPI print will be the main data focus. If a further inflationary drop is seen, this should weigh on USD near-term, allowing EUR some room to recover. However, if we see any unexpected strength in the data, this should feed into expectations of a further Fed hike this year, sending USD higher and pulling EURUSD down accordingly.Technical ViewsEURUSDThe reversal lower in EURUSD has seen the market breaking under the 1.1126 level. Price is now sitting on the bullish trend line from last year’s lows which, if broken, opens the way for a test of the 1.0785 level next. A break here will then see 1.0515 come into view as deeper support.