EUR/USD climbs above 1.14 on risk-on mood, ECB turns hawkish

• Euro gains as Sino-US trade talks ease tensions and ECB officials signal limited rate cuts ahead.
• ECB's Kazimir and Schnabel push back on extended easing expectations.
• NY Fed survey shows inflation expectations dipped, but household outlook worsened.

EUR/USD advanced on Monday during the North American session, driven by upbeat market sentiment fueled by high-level US-China tariff talks held in the United Kingdom. This, along with a perceived "hawkish" cut by the European Central Bank (ECB), pushed the pair above 1.1400, yielding gains of over 0.25%.

The market mood shifted positively on Sino-US news. Meanwhile, The Wall Street Journal revealed that Trump granted US Treasury Secretary Bessent some flexibility to lift export controls on China. Greenback was boosted by the headline but turned negatively on the day as investors seeking risk drove US equities higher.

A scarce economic docket in the US featured the release of the New York Fed Survey of Consumers Expectations (SCE), which showed that inflation expectations for one, three and five-year periods edged lower. Although that is positive, the poll showed that households' perceptions of their current and future financial situation had deteriorated.

In the Eurozone (EU), the docket is scarce, but ECB officials led by the Bundesbank chief Joachim Nagel, ECB's Isabel Schnabel, and Kazimir. Nagel said that the ECB should be flexible on rates, and Schnabel noted that the ECB should not expect sustained de-coupling with the Fed. Kazimir turned hawkish, saying the central bank is nearly or already at the end of an easing cycle.

Daily digest market movers: EUR/USD advances on ECB's hawkish tilt

• The New York Fed SCE revealed that inflation expectations for one year dropped from 3.6% to 3.2%, while those for a three-year horizon decreased from 3.2% to 3%. Lastly, for five years, it stood at 2.6%, down from 2.7% in the previous survey.
• Last Friday's solid US jobs report, along with expectations for an uptick in inflation data on Wednesday, suggest that the economy remains robust, warranting the Federal Reserve to hold rates unchanged.
• ECB officials reportedly expect rate cuts to be paused at the July meeting, according to Bloomberg. "Some officials see reductions in borrowing costs as maybe already finished, while others still back another move -- probably in September, according to the people."
• Financial market players do not expect that the ECB would reduce its Deposit Facility Rate by 25 basis points (bps) at the July monetary policy meeting.

Euro technical outlook: EUR/USD regains 1.1400 on muted session

EUR/USD uptrend remains intact as the pair has achieved successive series of higher highs and higher lows. Alongside this, the Relative Strength Index (RSI) is bullish. However, the pair must print a daily close above 1.14 for bulls to challenge higher prices. In that outcome, the pair's next resistance would be the 1.1450 mark, followed by 1.15. Up next lies the 1.16 figure.

Conversely, if EUR/USD falls below 1.14, the next support level is June's two-day low of 1.1344. A breach of the latter exposes the 20-day Simple Moving Average (SMA) at 1.1318, followed by 1.13 and the 50-day SMA at 1.1268.