Key event today:

12:00 UTC: EUR – Consumer Price Index.

The EUR/USD pair is attracting some buyers after falling to the 1.0800 area during the Asian session and is trying to sustain a rebound from the multi-week low reached last Thursday. However, the upward move lacks strong bullish conviction, and spot prices are currently trading around 1.0835, unchanged on the day.

The US dollar (USD) remains under selling pressure for the third consecutive day amid stagflation concerns in the US, which is a key factor supporting EUR/USD. Dollar bulls seem unimpressed by signs of rising inflation that could prompt the Federal Reserve to pause rate cuts in June. In fact, the US Personal Consumption Expenditures (PCE) Price Index, released Friday, showed that the core reading — excluding volatile food and energy prices — rose 0.4% in February, the biggest monthly increase since January 2024, pushing the annual rate to 2.8%.

Additionally, the University of Michigan survey revealed that 12-month inflation expectations rose in March to the highest level in nearly 1.5–2 years. This overshadowed consumer spending data, which showed a 0.4% increase last month after a downward revision to -0.3% in January. All this comes amid uncertainty surrounding US President Donald Trump’s trade policies and supports a “wait-and-see” stance from the Fed. However, these factors are failing to give the USD a strong boost or pressure EUR/USD lower.

On the other hand, the euro seems to be supported by easing fears of a trade war between the EU and the US. In fact, the European Commission has reportedly prepared concessions to avoid the so-called retaliatory tariffs expected from Trump on Wednesday. Nevertheless, prevailing risk-off sentiment may still offer some support to the safe-haven dollar and limit the upside for EUR/USD. Traders now await preliminary German CPI data for fresh direction. The overall fundamental backdrop still supports the outlook for further gains in the pair.

Recommendation: BUY 1.0850, SL 1.0765, TP 1.0955.