No major events are expected today.

The euro is holding near multi-week highs on expectations that the Fed will cut rates as early as this week and as government bond yields stabilize around 10-year benchmarks. On Monday morning, the pair is trading near 1.1640–1.1650, reflecting a weaker dollar after a string of soft US data and sustained demand for risk assets. Comments about a possible “cautious” policy easing by the Federal Reserve support interest in the euro, while short-term profit-taking merely cools the upward momentum.

On the European side, the tone is set by improving business activity in the services sector and expectations that the ECB will keep rates unchanged, focusing instead on growth and inflation risks. The decline in hedging costs for dollar assets for eurozone investors is also a tailwind for the euro, reducing the premium for dollar liquidity. As a result, the fundamental balance over the near term looks moderately favorable for EUR/USD.

The trading idea is based on a scenario of a mild Fed move and neutral signals from the ECB, under which the rate expectations differential shifts in favor of the euro. A buy from 1.1645 with a stop at 1.1625 takes into account possible volatility around US data releases, while a target at 1.1705 assumes a continuation of the corrective upswing if the current news backdrop persists. Strategy risks include a sudden strengthening of the dollar on strong US statistics or hawkish comments from individual Fed officials.

Recommendations: BUY 1.1645, SL 1.1625, TP 1.1705