No major events expected today.

The euro begins the week following a twenty-five basis point rate hike by the European Central Bank. The regulator raised the deposit rate to two point fifty percent and indicated that inflation will remain above target longer than expected. This maintains support for the euro; however, the effect of the decision is already partially priced in by the market, while rising energy costs simultaneously increase risks for the eurozone economy.

The American side of the pair received a fresher impulse following August inflation data. The growth in consumer prices strengthened expectations of a Federal Reserve rate hike at the September fifteenth to sixteenth meeting, while United States Treasury yields remain near multi-year highs. For the dollar, this creates an advantage ahead of the regulator’s decision, especially given investors’ cautious stance toward risk.

As a result, European Central Bank support for the euro does not yet outweigh the re-evaluation of the Federal Reserve’s trajectory. Expensive energy further complicates growth prospects for the eurozone, while expectations of a United States rate hike remain an active driver of the current session. Provided this background persists, the priority remains with a decline in EURUSD.

Recommendations: SELL 1.1595, SL 1.1630, TP 1.1515.