EUR/USD freezes in place near multi-month highs

• EUR/USD stuck to its near-term midrange as Fiber traders mull their options.
• US data dominates the economic release calendar this week.
• US JOLTS Job Openings, CPI and PPI inflation, and Consumer Sentiment loom over the week.

EUR/USD cycled in familiar territory on Monday, kicking off the new trading week on a notable quiet note as Fiber traders gear up for a US-data-heavy data docket on the cards for this week. Equities roiled on Monday, falling nearly across the board as investors pull back in the face of rising recession fears, but Fiber traders have battened down the hatches as they await key US inflation figures this week before solidifying their bets.

Forex Today: Attention shifts to Japanese GDP and US jobs data

European economic data is strictly mid-tier or lower this week, as markets pivot to face a wide spread of key US releases. JOLTS Jobs Openings kick things off on Tuesday, which are forecast to rise slightly to 7.75M in January from the previous 7.6M. US Consumer Price Index (CPI) inflation follows up on Tuesday, and investors are hoping for a continued easing in inflation pressures after a surprise uptick in inflation metrics at the start of 2025 blindsided markets. Investors have been betting on easing inflation to keep pushing the Federal Reserve (Fed) toward more rate cuts, despite ongoing talking points from policymakers increasingly tipping their hats to wobbly US trade policies increasingly hampering forecasting abilities.

Median market forecasts expect a slight cooling in headline and core CPI numbers. Headline CPI inflation in February is expected to ease to 0.3% MoM from 0.5%, while core monthly CPI is expected to tick down to a matching 0.3% from 0.4%. Annualized CPI is similarly expected to drop slightly to 2.9% YoY from 3.0%, while core CPI for the year ended in February is forecast t tick down to 3.2% from 3.3%.

On-and-off tariffs weigh on investor sentiment

Markets continue to feel bearish pressure due to President Donald Trump's clumsy tariff threats, which his administration keeps revisiting. The White House is attempting to impose significant tariffs on the US's closest trading partners to generate revenue that can counterbalance the large deficits arising from Trump's proposed tax cuts. However, implementation is challenging, as the most vocal opponents of Trump's tariff plans are largely US consumers and businesses that face heightened spending and operational costs due to retaliatory tariffs affecting crucial US industries and sectors.

President Trump faced down questions about a possible recession in the US economy, waving the subject off and branding an economic downturn as a "transition" period during a weekend interview with Fox News that was held from broadcast until early Monday. Donald Trump eventually capitulated on his own words, acknowledging that the US could be in for a 'rough patch'. President Trump and his staff pulled double-duty on Monday attempting to rebrand the recent upswing in inflation and broad-market risk aversion as the fault of the previous Biden administration, rather than a direct result of the US' wobbly approach to enacting tariffs on key US trading partners.

EUR/USD price forecast

EUR/USD got stuck in the muck on Monday, mulching chart paper near the 1.0850 region as Fiber's recent bull run looks set to end. EUR/USD easily pierced through the 200-day Exponential Moving Average (EMA) last week, soaring through the key moving average near 1.0630.

Fiber climbed 5.1%, or 528 pips, bottom-to-top from the last swing low at 1.0360, but bullish momentum looks set to take a pause. Technical oscillators are pinned in overbought territory, implying EUR/USD could be primed for a fresh push to the low side.

EUR/USD daily chart