EUR/USD traded higher Monday, despite a volatile session triggered by conflicting reports on U.S. tariff strategies. The pair rallied to a high of 1.0437 following a Washington Post story suggesting narrower tariffs before retreating to 1.0355 after Trump refuted the report. However, the euro’s resiliency, closing up +0.75%, was underpinned by economic data suggesting the ECB may lean less dovish. Stronger-than-expected eurozone S&P PMIs and German inflation contrasted with downward revisions to U.S. durable goods orders and PMIs, driving German-U.S. spreads to their tightest levels since early November.

Technicals suggest EUR/USD maintains a bullish bias. Rising RSIs and a monthly bull hammer highlight improving sentiment, with the pair trading above its 21-day moving average. Key resistance is at 1.0437, Monday’s high, with additional targets near 1.0500. Support is at 1.0355, Monday’s low, and 1.0300. A break above 1.0437 would confirm further upside, while a move below 1.0355 could shift momentum back to the downside.

This week’s U.S. data will be pivotal for EUR/USD. November JOLTS, December ISM manufacturing PMI, and Friday’s jobs report will determine the market’s expectations for Fed policy. Slowing jobs and growth could narrow yield spreads further, squeezing EUR/USD shorts and driving the pair higher. Alternatively, robust U.S. data could strengthen the dollar, capping the euro’s rally and bringing support levels into play. Traders will monitor these developments closely as EUR/USD navigates a crucial week.