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EUR/USD Holds Steady Despite Holiday Pause in USD Trading

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The EUR/USD pair sustains its upward trajectory for the fourth consecutive session, buoyed by subdued US Dollar (USD) sentiment amidst the Presidents’ Day holiday in the United States (US). Despite the USD's brief strength following improved US Producer Price Index (PPI) data on Friday, the EUR/USD pair managed to close the session with gains.

Examining the technical landscape on the H4 timeframe reveals a notable RSI Divergence around the resistance area (marked by the Red Rectangle). This divergence suggests a potential pullback in the price, retracing to the previous Fair Value Gap (FVG) before resuming its upward momentum.

Monday's economic calendar lacks significant events, providing little impetus for major market movements. However, market participants are keenly observing developments surrounding the US Dollar Index (DXY), which continues its decline. This downtrend follows dovish remarks from Mary C. Daly, President of the San Francisco Federal Reserve (Fed), during Friday's Annual National Association for Business Economics Economic Policy Conference.

Daly's comments hint at a cautious approach to monetary policy, suggesting that three rate cuts are a reasonable baseline for 2024. She emphasized the premature nature of considering economic intervention withdrawal, leading to a decrease in US Treasury yields and subsequent pressure on the USD.

In summary, the EUR/USD pair maintains its bullish momentum amid holiday trading conditions, while attention shifts to technical indicators and Fed commentary for further market insights.