No important events are expected today.

The euro begins the session amidst a more cautious attitude towards European assets. A sharp rise in oil prices once again increases fears of imported inflation while simultaneously raising risks for the Eurozone’s economic growth. The upcoming ECB decision continues to support expectations of a tighter policy, but weak business dynamics limit the single currency’s ability to sustainably capitalize on this factor.

For the dollar, the main impulse remains the demand for defensive liquidity due to the escalation in the Middle East. Additional support for the US currency comes from rising Treasury yields: the market considers that a new energy impulse might force the Fed to hold rates higher for longer, despite the recent slowdown in US inflation.

As a result, local support for the euro from ECB expectations is currently yielding to the stronger dollar factor of the current session. The rising cost of energy is particularly sensitive for the Eurozone, as it can simultaneously worsen consumption prospects and maintain price pressure. If geopolitical tensions and heightened demand for the dollar persist, the base scenario allows for a decline in EUR-USD.

Recommendations: SELL 1.1440, SL 1.1470, TP 1.1370.