EUR/USD pair breaks out through a multi-day-old trading range and touches a fresh high since February 2022, around the 1.1485 area during the Asian session on Monday. The momentum is sponsored by the bearish sentiment surrounding the US Dollar (USD), which supports prospects for an extension of the recent well-established uptrend.

Despite hawkish comments from Federal Reserve (Fed) Chair Jerome Powell, the uncertainty over US President Donald Trump's trade policies continues to undermine the Greenback. Powell said last Wednesday that the Fed is likely to keep its benchmark interest rate steady and wait for greater clarity before considering any adjustments to the policy stance. Meanwhile, Trump's back-and-forth tariff announcements have dented investors' confidence in the US economic growth and dragged the USD to a two-year low at the start of a new week.

The aforementioned factors, to a larger extent, offset the European Central Bank's (ECB) dovish decision last week and act as a tailwind for the EUR/USD pair. The ECB lowered interest rates for the seventh time in a year on Thursday and warned that economic growth will take a big hit from US tariffs, bolstering the case for more policy easing in the months ahead. This, however, does little to attract any meaningful sellers around the shared currency, validating the near-term positive outlook for the currency pair amid relatively thin liquidity on Easter Monday.
Moving ahead, traders this week will take cues from scheduled speeches by ECB President Christine Lagarde on Tuesday and a slew of influential FOMC members this week. Apart from this, the market focus will be on the release of the flash PMIs, which might provide a fresh insight into the global economic health. This, in turn, might provide some impetus to the USD and the EUR/USD pair. Nevertheless, the fundamental backdrop suggests that the path of least resistance for the currency pair remains to the upside and any corrective pullback is likely to be bought into.

Source: Fxstreet