No important events are expected today.

The pair begins the session recovering after last week’s decline. A pause in US strikes on Iran and a drop in oil prices have eased fears of a new acceleration in US inflation. The 10-year US Treasury yield declined, and the probability of an immediate Fed rate hike contracted slightly, causing the dollar to lose part of the demand generated by geopolitical tensions.

For the euro, the outcome of the latest ECB meeting remains important. The regulator kept rates unchanged and confirmed its readiness to evaluate incoming data without a predetermined policy trajectory. Uncertainty surrounding the energy shock restrains a confident strengthening of the single currency; however, today’s drop in oil reduces the risk of additional pressure on the Eurozone economy and supports demand for the euro.

The main factor of the current session remains the dollar’s correction ahead of the Fed meeting starting on Tuesday. The market allows for hawkish signals from the US regulator, which limits the upside potential for EUR-USD. Nevertheless, the fresh momentum is tied to falling yields and weakening safe-haven demand for the dollar, making a moderate continuation of the pair’s recovery the base scenario.

Recommendations: BUY 1.1405, SL 1.1375, TP 1.1465.