No major events are expected today.

The euro enters the European trading session after a notable strengthening at the end of last week, though the supporting momentum now appears less one-sided. Eurozone inflation accelerated to 2.9 percent in July, while business activity showed improvement, keeping arguments in favor of a cautious ECB stance and limiting pressure on the single currency.

The main factor of the current session is a moderate recovery of the dollar following Friday’s decline. A weak US employment report significantly reduced expectations of a Fed rate hike, but the market has already partially priced in this information. On Monday, the US dollar index and Treasury yields are rising slightly, while market participants shift their focus toward inflation data later in the week.

For EUR-USD, this creates conditions for a downside correction: fresh European data supports the euro, but does not yet provide a strong enough local advantage to offset the current demand for the dollar. Provided cautious positioning is maintained ahead of US inflation, the baseline scenario allows for a drop in the pair without assuming a return to a strong dollar trend.

Recommendations: SELL 1.1550, SL 1.1580, TP 1.1485.