The EUR/USD strengthened Friday’s recovery and tried 1.0660. In the face of falling US rates, the Dollar struggles to gather momentum. The EMU Sentix Index unexpectedly declined in March. At the start of the week, EUR/USD makes a minor increase and returns to the 1.0660 area.

The EUR/USD is rising as the US dollar falls.

Despite some uncertainty surrounding the Dollar and widespread downward pressure on US and German rates, the pair appears to continue Friday’s significant rise north of 1.0600, the figure on Monday.

Fresh speculation about a possible reversal in the Fed’s tightening cycle has sapped some of the Dollar’s momentum during the last few days, giving the risk complex new life.

On the domestic front, Germany’s Construction PMI increased to 48.6 in February, but the Sentix Index’s gauge of investor confidence for all of Euroland unexpectedly declined to -11.1 for the current month.

Factory Orders will be the sole noteworthy release later in the NA session, seconded by short-term bill auctions.

What should I look for in the EUR?

Despite the persistent selling sentiment around the Dollar, the pair continues to rebound beyond the 1.0600 level.

In the meantime, the price movement of the euro should continue to closely track changes in the value of the Dollar and the ECB’s likely future actions after the bank raised rates by 50 basis points in March.

Relating to the euro area, recession worries seem to have subsided, but they continue to be a key factor supporting the single currency’s recovery and the ECB’s hawkish stance.

This week’s significant events in the eurozone include the Germany Construction PMI, the EMU Sentix Index, and Retail Sales (Monday). Germany’s retail sales and the EMU’s advanced Q4 GDP growth rate were released on Wednesday. Lagarde’s Final Inflation Rate, ECB (Friday).

Significant problems on hold include the ECB’s ongoing cycle of rate hikes despite declining expectations for a regional recession and persistently high inflation. Effect of the Russia-Ukraine conflict on regional inflation and development prospects. Risks of persistent inflation.

EUR/USD values to monitor.

The pair is now up 0.05% at 1.0638, and a break of 1.0715 (55-day SMA) would lead to 1.0804 (weekly high February 14) and 1.1032, respectively (2023 high February 2). On the other side, there is a strong support level around 1.0326, followed by 1.0481 (2023 low January 6), 1.0532 (monthly low February 27), and 1.0326. (200-day SMA).