No significant events are expected today.

The EUR/USD pair is trading lower around the 1.0770 mark in the early Asian trading hours on Monday. Investors have adopted a cautious stance and prefer to wait ahead of the release of key economic data from the US this week. Wednesday will see the spotlight on the final reading of the Consumer Price Index (CPI) for April, which is expected to show a rise of 3.4% compared to the previous year.

European Central Bank (ECB) policymakers noted last month that they are likely to cut interest rates in June, as inflation in the Eurozone, according to the April meeting report, is expected to return to 2% next year. Markets anticipate the ECB to lower the interest rate on June 6, despite the uncertain path of rate cuts. Growing speculation about an ECB rate cut and the potential delay by the Federal Reserve (Fed) in rate hikes are likely to limit the euro (EUR) upside and create headwinds for the EURUSD pair in the near term.

The surge in consumer inflation expectations has increased the likelihood of the Federal Reserve holding rates for longer. The inflation forecast hit its highest level since November 2023, with the one-year inflation forecast rising to 3.5% and the five-year forecast to 3.1%. Dallas Fed President Loretta Mester stated that there are upside risks to inflation, adding that it is still too early to cut interest rates.

Meanwhile, Minneapolis Fed President Neel Kashkari said he maintains a “wait-and-see stance” and that there is a “high” bar to cross before considering rate hikes to curb inflation. These “hawkish” remarks from Fed officials contribute to the strengthening of the US dollar and exert pressure on the major pair.

Recommendations: Trading primarily with buy orders at the price level of 1.0790. Considering sell orders at the price level of 1.0740.