No major events are expected today.

The euro enters the new week with a firmer fundamental footing following Friday’s dollar weakness. US retail sales unexpectedly declined in July, while softer inflation data reduced the likelihood of a Fed rate hike in September. For EURUSD, this diminishes the greenback’s advantage and leaves room for a moderate recovery in the pair.

At the same time, the euro is supported by expectations of further ECB policy tightening. A fresh survey of economists shows that a majority expects another rate hike in September amid above-target inflation and eurozone economic resilience. The diverging expectations between the Fed and the ECB are turning more favorable for the European currency, although high energy prices continue to cap market confidence.

The main downside risk remains a resurgence in dollar demand should global market sentiment deteriorate or US economic data surprise to the upside. However, at the start of the session, the recent repricing of US monetary policy remains the dominant factor. As long as it holds, the fundamental edge stays tilted toward the euro, making further upside in EURUSD the base scenario.

Recommendations: BUY 1.1570, SL 1.1540, TP 1.1645.