Key Events Today:

12:30 UTC: USD – Change in Retail Sales.

The EUR/USD pair rose to 1.0650 during Monday’s Asian session, recovering from a five-month low of 1.0622 reached last Friday. The U.S. dollar strengthened due to increased dollar buying amid geopolitical turmoil, contributing to the decline of the EURUSD pair. Additionally, the European Central Bank (ECB) and the Federal Reserve (Fed) presented diverging monetary policy forecasts. The ECB indicated that if core inflation continues to slow as expected, a rate cut could be considered in June.

High inflation in the U.S. and strong macroeconomic indicators are prompting the Fed to revise its plans to ease monetary policy. The likelihood that interest rates will remain unchanged at the June meeting has risen to 63.5%, according to the CME FedWatch Tool, up from 46.8% last week. On Monday, investors will be closely monitoring Eurozone industrial production data, accounting for seasonal fluctuations, and U.S. retail sales.

Boston Federal Reserve Chair Susan Collins stated on Friday that she expects “about two” rate cuts in 2024, but also anticipates a reduction in inflationary pressure later this year. She highlighted the uncertainty regarding the timing of potential rate cuts and noted that while a rate hike is not currently part of the baseline scenario, it cannot be completely ruled out.

Recommendations: Predominantly consider buy orders at a price level of 1.0685. Consider sell orders at a price level of 1.0630.