After clinching new 2023 highs, the pair now slips as markets contemplate a series of factors and their potential impact on the upcoming monetary policy decisions by the US Fed (Wednesday) and the European Central Bank (Thursday).
US PCE Inflation moderated in March based on last week's report, but remains elevated, while the economy grew by just 1.1% in the first quarter according to preliminary data. Financial stress remains in the system meanwhile, as the troubled First Republic Bank disclosed massive deposit outflows, with regulators seizing the institution and selling the bulk of its assets to JP Morgan Chase yesterday. 
Fed officials will have to grapple with the above news before delivering their decision, against a volatile backdrop. Their March projections imply one more hike before pausing , whereas persistent inflation and strong labor market put pressure for sustained restrictive policy stance.
On the other side of the Atlantic, Eurozone managed to eke out 0.1% growth q/q in the first quarter according to Friday's first reading. Today preliminary inflation report showed that headline CPI ticked up in April (7% y/y), while the sticker core inflation inched down (5.6% y/y).
This creates a murky background as markets try to assess the ECB's next move. The central bank has been very hawkish and is widely expected to hike rates again, but the size and forward guidance are less clear. A Reuters poll showed that economist project a slowdown to 0.25%, but a bigger move cannot be ruled out. 
EUR/USD slides this week and risks moving below the EMA200 (black line) that would make it vulnerable to the daily Ichimokou cloud. However the downside contains many support levels, with the ascending trend line from the 2022 lows following (at around 1.0690).
The common currency is at the driver's seat above the EMA200 but fresh catalyst will be required for breaking fresh ground and challenging 1.1233. The pair's trajectory will be determined by the outcome of the Fed & ECB meetings.
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.
Retrieved 02 May 2023 https://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20230322.pdf