No significant events are expected today.

The Euro-Dollar pair is trading on a stronger note around 1.0710 in the early hours of Asian trading on Monday. The weakening of the US dollar (USD) below the 106.00 mark provides some support for the main pair. Monday will see the first reading of Germany’s Consumer Price Index (CPI) for April. On Wednesday, all attention will be focused on the US Federal Reserve’s monetary policy meeting, where no change in rate is expected.

Recent US inflation data led to a reduction in expectations about when the Federal Reserve (Fed) will start lowering interest rates. According to the CME FedWatch tool, the probability of a rate cut by the July meeting dropped from 50% last week to 25%, while traders estimated a nearly 60% chance that the Fed will lower the interest rate at the September meeting. This, in turn, could boost the US dollar rate and limit the growth of the EUR/USD pair in the near term.

On Friday, the US Bureau of Economic Analysis reported that the Personal Consumption Expenditures (PCE) price index in March rose by 2.7% year-over-year, compared to the previous value of 2.5%, which is above the forecast of 2.6%. The Core PCE index, which the Fed prefers to use for measuring inflation, remained at 2.8% year-over-year in March, higher than the expected 2.6%. On a monthly basis, both the main and core PCE price index in March increased by 0.3%.

Recommendations: Predominantly trade Buy orders from the current price level.