No major events are expected today.

The pair is trading near 1.1735 following a moderate strengthening of the Euro at the beginning of the week. Support for the pair comes from US Dollar weakness: investors are cautiously assessing the Fed’s policy outlook after rates were held in the 3.50–3.75% range, amid growing uncertainty due to the conflict involving Iran.

The Euro is also supported by expectations that the ECB could move toward a rate hike as early as this summer if price growth in the Eurozone remains above the target level. However, the regulator faces a difficult situation: high energy costs increase inflationary pressure while simultaneously dampening the region’s economic growth prospects.

Currently, the balance of factors is moderately favorable for the Euro: the Dollar is losing some demand amid doubts over the Fed’s next steps, while markets are pricing in a more hawkish stance from the ECB. The main risk for the pair remains intensifying fears of a recession in the Eurozone; however, until new data emerges, buyers maintain the upper hand.

Recommendations: BUY 1.1735, SL 1.1715, TP 1.1800.