Last week’s consolidation in the euro versus the US dollar resolved itself this morning as EUR/USD broke below trendline and Fibonacci support at 1.3848 to settle above the next level of support at 1.3550 at the end of the day. The trigger for the move? Dovish comments by European Central Bank Vice President Lucas Papademos that suggested the ECB may indeed cut rates on January 15. Data released at 5:00 ET on Tuesday may confirm or negate this sentiment as Eurostat estimates for Euro-zone CPI are projected to show that inflation growth eased to a 1.8 percent pace in December from 2.1 percent. Given European Central Bank President Jean-Claude Trichet’s more bearish stance on economic growth and the bank’s total of 175 basis points worth of rate cuts since October, a weaker-than-expected CPI reading could exacerbate the market’s speculation that the central bank will cut rates again on January 15, and weigh on the euro. On the other hand, if CPI manages to hold at or above the ECB’s 2 percent target, the currency could gain as the markets assume the central bank will not be as quick to reduce rates. Related Article: Top Forex Trades for 2009 **For a full list of upcoming event risk and past releases, go to the DailyFX Calendar