Ella 
EUR/USD is under some selling pressure and weighed down by a pick-up in demand for the greenback.
Bets on further rate hikes by the Federal Reserve have been a key factor supporting the dollar.
Expectations that the European Central Bank will soon end its rate hike cycle also weighed on EUR/USD.
EUR/USD saw some supply on Monday and retreated further from a four-day high set on Friday following weak U.S. non-farm payrolls, around 1.1040. EUR/USD slipped back below the 1.1000 psychological hurdle in Asia and appears to have halted a two-day rally from the 100-day simple moving average (SMA) near 1.0910, which hit a near one-month low last Thursday, around 1.0910.
The greenback has attracted some bargain hunting and has been a key factor putting some pressure on the euro/dollar (EUR/USD) as traders increasingly believe the Federal Reserve (Fed) will stick to its hawkish stance. The closely watched U.S. monthly employment data showed that the U.S. economy recorded 187,000 new non-farm payrolls in July, while non-farm payrolls were revised down in May and June, suggesting that demand for workers is slowing. Still, solid wage growth and an unexpected drop in the unemployment rate point to continued tightness in the labor market. That opened the door for the Federal Reserve to hike rates by another 25 basis points in September or November and provided some support for the dollar.
On the other hand, expectations that the European Central Bank (ECB) will halt its nine straight rate hikes in September weighed on EUR/USD amid signs that underlying inflation in the euro zone has peaked. The European Central Bank pointed out in its economic communiqué released last Friday that underlying inflation in the euro zone may peak in the first half of 2023. This is seen as another factor for EUR/USD to move higher. Still, bears may refrain from making aggressive bets ahead of U.S. inflation data this week.
The all-important U.S. inflation announcement on Thursday will play a key role in shaping market expectations for the Fed’s future rate hike path and driving demand for the dollar. With no U.S. economic data released, the dollar’s movement will depend on the speeches of a group of Fed officials. Any speech involving policy could provide some impetus to the dollar, leaving traders looking for short-term opportunities in EUR/USD. However, the above-mentioned fundamental background shows that the EUR/USD has the least resistance to the downside.
