The World Bank slashed its 2023 growth forecast for the US on Tuesday, now expecting GDP of just 0.5%, from 2.4% in the June projections . This supports markets expectations that the Fed will become less aggressive in order to avoid a hard-landing, which were reinforced after Friday's Jobs Report and the contraction of the services sector.
CME's FedWatch Tool prices-in a miniscule 0.25% hike at the next Fed meeting, assigns the highest probability to a terminal rate of 5.0% and also points to rate cuts towards the end of the year . These projections are not in line with the Fed's hawkish stance, since officials expect rates to peak at a median of 5.1% and don't see cuts in 2023. 
As such, today's CPI Inflation figures will be closely watched, as well as any commentary by policy makers after the release. If the Fed intends to increase rates by more than 25 basis points, it will likely have to prepare markets for that, over the coming days.
On the other side of the Atlantic, the European Central Bank has been very hawkish, expecting to raise interest rates "significantly at a steady pace", despite projection for an economic contraction . ECB's Mr Villeroy pressed on recently, saying that it would be good to reach "the right terminal rate" by the summer, which implies at least three more hikes. 
Markets don't believe the Fed will hike by as much as its rhetoric and forecasts suggest, but appear to be more convinced by the European Central Bank, which has more ground to cover. This helps EUR/USD into a positive week, trying to take out the May highs (1.0787), according to our last analysis. This brings the 50% Fibonacci of the 2021 high/2022 multi-year low (1.0942) in the spotlight, but bulls will likely need a catalyst for that.
EUR/USD loses steam today though and given that the Relative Strength Index (RSI) stays close to overbought levels we can see downward pressure. The next leg of the move will likely be determined by today's CPI data, but a big disappointment would be needed, for a breach of the EMA200 (1.0560) that could pause the upside momentum.
Senior Financial Editorial Writer
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.
With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.
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