• EUR/USD gained traction and climbed to the 1.0600 area on Monday.
• The cautious market mood could limit the pair's upside.
• Near-term technical outlook suggests that the bullish potential remains in place. 

Following a quiet Asian session, EUR/USD gained traction and turned positive on the day slightly above 1.0600. In case the pair manages to stabilize above that level, buyers could remain interested.

The renewed US Dollar (USD) weakness in the European morning helped EUR/USD edge higher. Nevertheless, the cautious market stance could make it difficult for the pair to extend its recovery in the near term. 

The Euro Stoxx 50 Index opened in negative territory on Monday and the US stock index futures were last seen losing about 0.2%. In the absence of high-tier data releases, a bearish opening in Wall Street could help the USD stay resilient against its peers in the second half of the day.

Meanwhile, the benchmark 10-year US Treasury bond yield turned north and advanced toward 5% early Monday, after losing 1.5% on Friday. A break above 5% in the 10-year yield could provide an additional boost to the USD in the near term.

On Tuesday, S&P Global PMI surveys from Germany, the Euro area and the US will be watched closely by market participants ahead of the European Central Bank (ECB) monetary policy announcements on Thursday.

EUR/USD Technical Analysis

EUR/USD holds above the ascending trend line coming from early October and the Relative Strength Index (RSI) indicator on the 4-hour chart stays above 60, reflecting the bullish bias. 

1.0600, where the 200-period Simple Moving Average (SMA) is located, aligns as a key pivot point. If EUR/USD confirms that level as support, 1.0640 (Fibonacci 38.2% retracement) and 1.0700 (Fibonacci 50% retracement) could be set as next bullish targets.

On the downside, strong support is located at 1.0570-1.0560 (50-period SMA, 100-period SMA, Fibonacci 23.6% retracement) ahead of 1.0540 (ascending trend line, static level) and 1.0500 (psychological level, static level).