EUR/USD rallied Monday on the back of broad-based U.S. dollar sales mostly driven by central bank influences but bulls seem to lack enthusiasm ahead of U.S. CPI and ECB risks.

Comments in a newspaper interview from BOJ Governor Kazuo Ueda rallied the yen across the board and drove USD/JPY sharply lower.

USD/CNH fell away from Friday's 11-month high after the PBOC set a very strong yuan fix, disinflation pressure in China eased and new loans jumped, which could help stimulate China's economy.

But EUR/USD bulls appeared reluctant for fear of getting burned with analysts predicting U.S CPI on Wednesday would show headline inflation rising again.
An as-expected or above result could lead the Fed to pursue higher-for-longer rates or possibly hike further.

Economists expect the ECB to hold rates steady on Thursday and into next year before cutting in Q3 2024, curbing EUR/USD bulls' enthusiasm.

Euro positioning may also be a limiting factor, with CFTC data indicating long postions remain elevated even after recent reductions, leaving EUR/USD bulls in need of motivation.

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