EUR/USD has been consolidating gains off the monthly low it struck in May but it may struggle to rally if the ECB fails at this week's meeting to adopt a more aggressive tone on inflation than markets currently expect.

EUR/USD had failed to make gains from news that euro zone inflation struck a record high of 8.1% in May even though it spurred calls for the ECB to possibly hike rates more aggressively nL1N2XN11F and markets to raise estimates for the terminal ECB rate nL8N2XT1P4.

EUR/USD gains remain elusive even as euro zone rates rally.
December 2023 Euribor futures FEIZ3 struck a record low Tuesday before bouncing slightly.

Without a more hawkish stance at the June 9 ECB meeting, which would be in contrast to ECB President Christine Lagarde's recent comments nL2N2XG0G8, EUR/USD may sink as investors looking for much tighter policy will be disappointed and sell the euro.

In contrast, a hawkish ECB surprise could spur EUR/USD bulls into action.
A rally through the 55-DMA, 50% Fib of 1.1185-1.0349 and daily cloud base may ensue ahead of Friday's U.S. May CPI nL1N2XT122, which may underpin EUR/USD.

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