No significant events are expected today.

The EUR/USD pair is trading with a slight negative bias near the 1.0550 mark on Monday during Asian trading hours. Investors are closely watching the U.S. Consumer Price Index (CPI) report for November, scheduled for release on Wednesday. On Thursday, the European Central Bank (ECB) rate decision will take center stage, with investors looking for clues on future monetary policy moves.

Expectations of a 0.25% rate cut by the Federal Reserve (Fed) on December 18 rose last week after the jobs report showed a significant increase in employment, though not at a pace that would necessarily prevent the Fed from lowering rates to 4.25–4.5% from the current range of 4.5–4.75%.

Amid high hopes for rate cuts in the U.S. later this month, Wednesday’s inflation data could be the only potential hurdle for a third consecutive Fed rate cut. Annual CPI inflation for November is expected to rise to 2.7% year-on-year from 2.6% in October. Core inflation, which excludes volatile food and energy prices, is forecasted to remain unchanged at 3.3% year-on-year in November.

The European Central Bank is expected to cut rates for the fourth time this year at its final policy meeting of 2024 on Thursday. Analysts anticipate that the ECB will stick to its data-dependent guidance, reiterating that it “does not pre-commit to a particular rate path.” However, the press conference by ECB President Lagarde may provide hints about the future trajectory of interest rates. Any “dovish” remarks by ECB policymakers could impact the euro’s exchange rate (EUR) against the U.S. dollar.

Recommendations: Monitor the 1.0550 level. Consider Buy positions if the pair consolidates above this level, or Sell positions in case of a bounce.