The EUR to USD pair is showing modest gains under the 1.0900 barrier in the early hours of Asian trading on Monday. The European Central Bank’s (ECB) January monetary policy meeting on Thursday will be closely watched by traders. At the time of publication, the euro-dollar pair is trading at 1.0901.

Members of the ECB Governing Council are cautious about prematurely easing financial conditions. No changes are expected at the January meeting on Thursday. However, traders will be more focused on ECB President Christine Lagarde’s speech after the meeting, whether she will confirm the first rate cut this year. Investors believe the ECB will start cutting interest rates in the spring, as steady progress towards its 2% inflation target has been driven by the implementation of a tighter real rate policy.

Markets have become less confident that the Federal Reserve (Fed) will cut interest rates in March after U.S. economic data last week, including retail sales and the consumer sentiment index, showed improvement in the U.S. economy. According to CME FedWatch Tool data, the probability of a rate cut at the March meeting fell to 49.3%, down from 81% a week ago.

Recommendations: At the price level below 1.0890 consider Buy. At the price level of 1.0915 consider Sell