EUR/USD advanced Monday, buoyed by optimism surrounding Scott Bessent's nomination as U.S. Treasury Secretary. The news sparked hopes of fiscal discipline and steady growth, tightening German-U.S. yield spreads and offering some relief to the euro. EUR/USD rallied past the 5-DMA to hit an intraday high of 1.0530 before retreating slightly as U.S. yields rebounded and risk sentiment shifted amid USD/CNH gains. The pair ended the session up 0.67%, near 1.0495.

From a technical perspective, EUR/USD’s rally faces significant resistance at 1.0530 and 1.0575, levels that align with prior highs and Fibonacci retracement zones. Support rests at 1.0465, with further downside risk if the pair slips below the 1.0429 recent low. The pair’s ability to maintain gains will depend on a break above key resistance levels and continued support from narrowing spreads.

The near-term focus will be on U.S. November consumer confidence and housing data on Tuesday, which could influence the Fed’s outlook and dollar strength. Meanwhile, eurozone growth risks persist, with deteriorating German Ifo and PMI data increasing the probability of a deeper ECB rate cut. EUR/USD bulls may remain vulnerable if economic divergences between the U.S. and eurozone widen, despite the current optimism surrounding U.S. fiscal policy.