No significant events are expected today.

The EUR/USD pair is trying to recover from losses in the previous session, trading near the 1.1080 level during the Asian session on Monday. However, the pair’s growth may be limited as recent inflation data from the Eurozone has strengthened expectations for a rate cut by the European Central Bank (ECB) at its upcoming policy meeting on Thursday.

Given that core inflation is approaching 2% and long-term inflation forecasts remain roughly at the same level, the ECB has enough grounds for further monetary easing. Additionally, mixed GDP data from the Eurozone last week has reinforced expectations of a potential ECB rate cut.

On Friday, economic data from the US heightened uncertainty about the likelihood of an aggressive rate cut by the Federal Reserve at its September meeting. The US Bureau of Labor Statistics (BLS) reported that non-farm payrolls (NFP) increased by 142,000 in August, below the forecast of 160,000 but better than the downward-revised July figure of 89,000. Meanwhile, the unemployment rate fell to 4.2%, as expected, compared to 4.3% in the previous month.

According to the CME FedWatch Tool, markets fully expect the Federal Reserve to cut rates by at least 25 basis points (bps) at the September meeting. The probability of a 50 bps cut has slightly decreased to 29.0% compared to 30.0% a week ago.

Chicago Federal Reserve Bank President Austan Goolsbee noted on Friday that Fed officials are starting to agree with the broader market view that a rate adjustment by the US central bank is inevitable, according to CNBC. FXStreet’s FedTracker system, which uses its own AI model to assess Fed officials’ speeches on a scale of 0 to 10, rated Goolsbee’s comments as “dovish,” giving them a score of 3.2.

Recommendations: Watch for the 1.1115 level. If the price consolidates above this level, consider Buy positions; if it bounces back, consider taking Sell positions.