The EURUSD pair is approaching again a key support zone ahead of key US economic data in the next couple of weeks

The USD has been supported across the board in the first half of the month as the positive news on the trade front triggered a more hawkish repricing in interest rates expectations. Once the market got back in line with the Fed's baseline of two rate cuts in 2025, the greenback lost that support and began to weaken again.

For further gains, the US Dollar will need either strong economic data to make the market to price out the rest of the rate cuts expected by year-end or weak data from its peers to make the divergence with the Fed stronger.

Yesterday, we got a little taste of that as the very soft French inflation figures weighed on the euro. The ECB policymakers also continue to blame the stronger euro for the downside risks for inflation. This might eventually force them to cut more than expected while the Fed keeps rates higher for longer due to upside inflation risks as seen already in the latest US Flash PMIs.

On the 4 hour chart, we can see that the price yesterday broke below the minor upward trendline and extended the fall as more sellers started to pile in. We have a strong support zone around the 1.1270 level where we can find also the confluence with another trendline. That's where we can expect the buyers to step in with a defined risk below the support to position for a rally into new highs. The sellers, on the other hand, will want to see the price breaking lower to increase the bearish bets into the 1.10 handle next.

Starting from next week, we have lots of key events for the USD including the release of the ISM PMIs, the NFP and the CPI, which will culminate into the FOMC decision on June 18th.