Fundamental analysis of EUR/USD

During the Asian session on Tuesday, the pair struggled to maintain its upward momentum, showing a slight negative bias and trading at 1.07170. 
Uncertainty over future ECB interest rate decisions continues to weigh on the single currency. Market participants are divided on whether the ECB will continue its successive interest rate hikes amid persistent inflation or stop tightening policy given the gloomy economic future. The immediate deciding factor for the pair remains the upcoming German and Eurozone economic sentiment data. There is a suggestion that the confidence index is falling, suggesting a lackluster economic outlook. If the German business climate index falls from its current level of -12.3 to an expected -15.0, in line with the expected decline in the ZEW business climate index in the eurozone of -5.5 to -6.2, this would exacerbate the recession. Such a trend could reinforce expectations that the European Central Bank will keep interest rates unchanged at its next meeting on Thursday. 
On the other side of the Atlantic, the focus remains on US inflation dynamics. The US CPI report for August is currently in the spotlight. Current market sentiment indicates that the Fed may hold off on changing interest rates for this month. However, the future is uncertain. The possibility of higher than expected core inflation could raise expectations of a Fed rate hike in November. In addition, data released last week suggested that the U.S. economy is strengthening, suggesting that the Fed will be inclined to keep interest rates high over the long term. This dynamic could pose economic challenges as borrowing costs rise, reducing optimism in global stock markets. The US dollar seems to be regaining stability after a sharp drop on Monday. High yields on US Treasury bonds, supported by the prospect of further policy adjustments by the Federal Reserve, as well as a cautious global economic situation support the dollar as a safe haven currency. 
Meanwhile, financial investors are eagerly awaiting the release of important economic data, such as US consumer inflation statistics and the upcoming ECB meeting, which will certainly have a significant impact on the trajectory of the EUR/USD pair. In this regard, traders should be cautious and avoid hasty policy decisions.
Technical analysis and scenarios:

Given that the value of the Stochastic oscillator (37.4131) is below the 58.9174 signal line, this indicates that the EUR/USD pair may be in a short-term downtrend. This is also confirmed by the fact that the MACD value is below its signal line, indicating the presence of bearish momentum. The Bollinger Bands indicate that the price is currently in the upper range and close to the middle band. The price range is also widening, which means increased volatility. If the pair takes a bullish turn, the middle Bollinger Bands (1.07190) and the current price level could act as potential support, pushing the price higher. Although the main scenario suggests bearish movement, the widening Bollinger Bands indicate increased volatility, which means the possibility of sharp price moves in either direction.
Main scenario (SELL)
Recommended entry level: 1.06700.
Take Profit: 1.06200.
Stop Loss: 1.07000. 
Alternative scenario (BUY)
Recommended entry level: 1.08090.
Take Profit: 1.08700.
Stop loss: 1.07870.