No other significant events are expected today.

On Monday, the Euro-dollar pair remains subdued for the third consecutive day, trading around 1.0690-1.0685 during the Asian session, slightly above the lowest levels since early May. The overall currency continues to be undermined by uncertainty over the outcome of the French presidential election, fueling concerns that a new government could worsen the financial situation in the Eurozone’s second-largest economy. Additionally, Friday’s flash PMI indices showed a sharp slowdown in business activity across the Eurozone in June. This, coupled with some subsequent USD buying, has been key factors exerting downward pressure on the EUR/USD pair.

The US Dollar Index (DXY), which tracks the dollar against a basket of currencies, rose to its highest level since May 9th on the back of Friday’s PMI data, which indicated a 26-month high in US business activity for June. The data confirm the Federal Reserve’s patient approach, although signs of easing inflationary pressures are prompting speculation about a rate cut in September. This could restrain USD bull runs from aggressive posturing and help limit further declines in the EUR/USD exchange rate.

Traders may also prefer to await Friday’s release of the US Personal Consumption Expenditures (PCE) Price Index data to gauge the Fed’s rate-cutting stance. This, in turn, will play a crucial role in influencing the dynamics of the USD in the near term and provide a significant impetus to the EURUSD pair. Currently, traders are awaiting Germany’s IFO Business Climate data and speeches from influential FOMC members to exploit short-term opportunities in the absence of significant macroeconomic releases from the US.

Recommendations: Monitor the level at 1.0700; upon confirmation above, consider accumulating Buy positions.