The EUR/USD pair traded flat on Monday as market activity remained subdued due to a holiday-thinned session. With U.S. markets closed for Presidents’ Day, liquidity was limited, keeping major currency movements in check.
Investors largely refrained from making significant bets as they awaited key economic data later in the week. The euro struggled to gain momentum despite lingering expectations that the European Central Bank (ECB) could hold rates steady for longer amid sticky inflation. Meanwhile, the U.S. dollar remained stable, with traders looking ahead to upcoming Federal Reserve signals on monetary policy.
Recent data has shown mixed economic signals from both the eurozone and the United States, adding to the market’s cautious sentiment. While growth in the euro area has slowed, inflation remains a concern, keeping ECB policymakers on edge. In the U.S., resilient consumer spending and a strong labor market have fueled speculation that the Fed may delay rate cuts.
With no major economic releases on Monday, the forex market saw limited volatility. However, traders are bracing for key reports later in the week, including eurozone inflation figures and the Federal Reserve’s meeting minutes, which could provide clearer direction for the pair.
Analysts suggest that the EUR/USD outlook remains uncertain, with the next major move likely dependent on economic data and central bank rhetoric. Any signs of divergence between ECB and Fed policy expectations could trigger renewed volatility in the coming days.
For now, the pair remains in consolidation mode, with traders awaiting fresh catalysts to break the current range. A pick-up in liquidity on Tuesday could lead to more pronounced price action as investors reassess the economic landscape.
