Key events today:

14:30 UTC: EUR – ECB President Christine Lagarde will deliver a speech.

The EUR/USD pair continues its second consecutive session of growth, trading around the 1.1390 level during Asian hours on Monday. The Euro (EUR) is strengthening following a Bloomberg report that U.S. President Donald Trump has agreed to delay the enforcement of 50% tariffs on the European Union (EU) until July 9. On Sunday, European Commission President Ursula von der Leyen posted on social media that the EU is ready to move quickly on trade talks with the United States (US), but needs more time to reach a deal. On Monday, U.S. markets will be closed in observance of Memorial Day.

On Friday, President Trump threatened in a post on Truth Social to impose 50% tariffs on EU imports, claiming that Brussels sent Washington an unsatisfactory trade proposal. Trump stated: “Our discussions with them are going nowhere! So I recommend imposing straight 50% tariffs on the European Union starting June 1, 2025.”

Additionally, the EUR/USD pair is rising as the U.S. dollar continues to weaken due to uncertainty surrounding the U.S. economy. The U.S. budget deficit may widen further if Trump’s “big beautiful bill” passes the Senate, increasing the risk of prolonged high bond yields. Higher yields may result in increased borrowing costs for consumers, businesses, and governments.

U.S. markets remain under pressure amid worsening debt dynamics, as Moody’s downgraded the country’s credit rating from Aaa to Aa1. According to Moody’s, by 2035 the U.S. federal debt is expected to reach 134% of GDP, up from 98% in 2023, and the budget deficit could rise to nearly 9% of GDP.

Recommendation: BUY 1.1420, SL 1.1400, TP 1.1520.