The EUR/USD pair is trading near its weekly low of 1.1030 in Tuesday’s European session. Investors are cautious ahead of the release of US Consumer Price Index (CPI) data for August, which will provide insights into the Federal Reserve’s (Fed) potential interest rate cut.

US Inflation Expectations

The US CPI data is expected to show a deceleration in headline inflation but a steady increase in core inflation. Economists anticipate a 0.2% monthly increase in both headline and core inflation. The data will be crucial for determining the magnitude of the Fed’s interest rate cut.

ECB Monetary Policy Outlook

The European Central Bank (ECB) is widely expected to cut interest rates by 25 basis points (bps) on Thursday. While investors are confident about the ECB resuming its policy-easing process, market participants will closely watch the monetary policy statement and ECB President Christine Lagarde’s press conference for clues about future policy actions.

Lagarde is expected to deliver a dovish interest rate guidance, given the decline in German inflation and the weakening economic conditions. Financial market participants anticipate one more interest rate cut in the last quarter of this year.

EUR/USD Technical Analysis

The EUR/USD pair is currently trading below its 20-day Exponential Moving Average (EMA) and has a bearish near-term outlook. The 14-day Relative Strength Index (RSI) suggests a lack of momentum and a sideways trend. The pair is expected to find support near the psychological level of 1.1000.