Buying EURUSD with 1.1765 target

As it has been the case for weeks, the euro's climb is still being driven by the European Central Bank's (ECB) unapologetically hawkish tone. And the numbers back that up. Following May's data that showed eurozone inflation unexpectedly jumping to 3%, markets are now virtually certain that an interest rate hike will take place at the June 11 meeting.

Christine Lagarde has pulled no punches in her recent remarks, making it abundantly clear that the fight against price pressures is far from being over. Investors have gotten the message, pushing EU bond yields higher as a result. 

Across the Atlantic, the US Federal Reserve (Fed), led by Kevin Warsh, is playing a different game. The American economy may be showing resilience, though the regulator has clearly stepped off the gas, pausing its tightening cycle to take stock of earlier moves. This caution is weighing on the dollar index (DXY), with Treasury yields stabilizing and European assets becoming more attractive. 

Now, let's talk about the wildcard. Geopolitical tensions in the Middle East and the ongoing standoff with Iran have already sent energy prices climbing. For the bloc, this is a double-edged sword. On the one hand, it threatens GDP growth. On the other, it is a powerful inflationary force that ties the ECB's hands and rules out any policy easing.

Turning to the economic calendar, today's schedule is light ahead of Friday's blockbuster Nonfarm Payrolls (NFP) report. This calm could be just what the pair needs. It may allow the euro to drift gently higher as short positions are unwound. 

The ultimate recommendation is to buy EURUSD. Lock in profits at 1.1765. Place Stop Loss at 1.1530.

Calculate your open position so that a potential loss (protected by a Stop Loss order) is limited to 1% of your deposit. If your account balance does not allow entering a position of this size, it is better to skip the trade and wait for other market signals that meet low-risk criteria.