• EUR/USD scales higher for the fifth successive day and climbs to over a one-week high on Monday.
• The Fed rate cut uncertainty keeps the USD bulls on the defensive and lends support to the major.
• ECB rate cut bets might cap gains for the shared currency ahead of the US CPI report on Tuesday.

The EUR/USD pair builds on last week's recovery move from the 1.0725-1.0720 area, or its lowest level since November 14 and gains some positive traction for the first successive day on Monday. The momentum lifts spot prices to over a one-week peak during the early part of the European session, with bulls now looking to extend the momentum further beyond the 1.0800 mark amid a modest US Dollar (USD) downtick. The uncertainty over the likely timing and pace of interest rate cuts by the Federal Reserve (Fed) keeps the USD bulls on the defensive below a multi-month top touched last week. Apart from this, the underlying bullish sentiment across the global equity markets is seen as another factor undermining the safe-haven Buck.

That said, growing acceptance that the Fed will keep interest rates higher for longer in the wake of a still resilient US economy remains supportive of elevated US Treasury Bond yields and should act as a tailwind for the Greenback. Furthermore, bets that the European Central Bank (ECB) will start cutting interest rates at the start of the second quarter might contribute to capping the shared currency and the EUR/USD pair. This makes it prudent to wait for strong follow-through buying before confirming that spot prices have formed a near-term bottom. In the absence of any relevant macro data on Monday, speeches by FOMC members might provide some impetus, though the focus remains on the US consumer inflation figures due on Tuesday