The US Dollar remained steady on Monday following a tranquil weekend devoid of significant geopolitical events. However, this calm is unlikely to persist as the week promises a slew of critical economic releases. Investors are gearing up for a flurry of data, culminating in the highly anticipated US Employment Report on Friday, which includes the Nonfarm Payrolls figures for May. 

Monday's spotlight is on the health of the US manufacturing sector, with two key PMI surveys in focus. The final reading of the S&P Global Manufacturing PMI for May and the more influential Institute for Supply Management Manufacturing PMI will provide insights into factory activity. The initial estimate for the S&P Global Manufacturing PMI was pegged at 50.9, with expectations that it will hold steady at this level. 

The EUR/USD daily chart shows a significant technical development as the pair has broken above a crucial descending resistance line. This breakout, highlighted in the chart, suggests a potential shift in trend from bearish to bullish. The Relative Strength Index is trending upward, indicating increasing bullish momentum. Additionally, the price is trading above the 50-day and 200-day moving averages, further supporting the bullish outlook. If the pair sustains this breakout, it could target the next resistance level around 1.0950:

The US Dollar is struggling to find direction as market participants await clearer signals on the Federal Reserve's next move regarding interest rates. The uncertainty stems from Friday's US Personal Consumption Expenditure Price Index report, which revealed persistent inflationary pressures in April but weaker-than-expected personal spending data. The annual core PCE inflation, a key metric watched by the Fed, rose by 2.8% as anticipated. However, on a monthly basis, core PCE increased by just 0.2%, falling short of expectations and down from the previous 0.3% reading. 

Consumer spending, which represents more than two-thirds of US economic activity, saw a modest rise of 0.2% in April, missing forecasts of 0.3% and significantly lower than the previous month's 0.7%. This slowdown has heightened concerns about a potential deepening of the household financial squeeze, especially if the Fed maintains its current interest rate levels for an extended period. 

In light of the softer consumer spending figures, market sentiment has shifted slightly towards the expectation that the Fed might implement at least one rate cut this year. Interest rate derivatives such as overnight index swaps pencil in a 52% probability of a rate cut in the September meeting, a bit higher than 49% seen a week ago. 

The Pound Sterling has come under pressure in Monday’s London session, dipping but maintaining the crucial 1.2700 support level against the US Dollar. The timeline for the Bank of England to cut interest rates remains uncertain. Market participants expect the BoE might begin lowering rates by the August meeting. Despite a significant drop in annual headline inflation to 2.3% in April, BoE officials are still uneasy about the slow progress in reducing inflation in the service sector.