Key events today:

09:00 UTC: EUR – Consumer Price Index.

The EUR/USD pair is attracting buyers at the 1.0500 level early in the Asian session on Monday. The euro is rising as conservatives in Germany won the elections as expected. Traders are awaiting further election results in Germany.

Exit polls showed that the opposition conservative Christian Democratic Union (CDU) and its ally, the Christian Social Union (CSU), secured the highest number of votes in Germany’s federal elections on Sunday. As a result, party leader Friedrich Merz became the next chancellor, while the far-right Alternative for Germany (AfD) took second place. Now, all eyes are on how soon the conservative Christian Democrats can form a coalition government to introduce much-needed reforms for the struggling economy.

According to exit polls from ZDF, the CDU/CSU conservative bloc received 28.5% of the votes, followed by the far-right Alternative for Germany (AfD) with 20% and Chancellor Scholz’s Social Democratic Party with 16.5%.

Weak economic data from the US is weighing on the dollar. Data released by S&P Global on Friday showed that business activity in the US fell to a 17-month low in February. According to the latest data, the S&P Global Composite PMI declined to 50.4 in February from 52.7 in January. Meanwhile, the Manufacturing PMI increased from 51.2 to 51.6 over the same reporting period. The Services PMI fell from 52.9 in January to 49.7 in February, indicating a loss of momentum in the services sector.

Recommendation: BUY 1.0500, SL 1.0470, TP 1.0580.