EURUSD Higher Despite Gloomy ECB Bulletin

ECB Concerned Over Economic ProspectsIn its latest economic bulletin released today, the ECB shared little in the way of optimism for the health of the eurozone economy. While the bank acknowledges that inflation is declining, it notes that CPI is still elevated and is expected to remain so for too long. Additionally, it notes that the near-term prospects for the eurozone economy have weakened as a result of softer domestic demand driven by higher inflation and tightening financial conditions.Upward Inflation Risks RemainFocusing on inflation, the ECB warned that there are still clear upside risks such as the potential for food and energy prices to rise again as a result of the ongoing conflict between Russia and Ukraine. Specifically, the ECB points to Russia pulling out of the Black Sea Grain Initiative and the impact that is having.Global Activity SlowingOutside of the eurozone, the bank notes that while global activity has remained resilient this year, recent data reflects a loss of momentum. Additionally, the bank expressed concern over the divergence between services and manufacturing sector performance in recent months which has been widening globally.Overall, the tone of the report was fairly dim and points to downside EUR risks going forward linked to weaker growth prospects. Focus will now be on incoming inflation data as the market looks to gauge whether the bank will hike again in September or hold steady.Technical ViewsEURUSDThe correction lower in EURUSD has seen the market trading back below the 1.1126 level. However, the move has found support for now into a test of the rising trend line. While the trend line holds, the focus remains on a continuation higher and an eventual breakout towards the 1.1503 level.