EUR/USD remains on track to close at fresh multi-week highs above 1.2030

• EUR/USD posts impressive gains at the start of the week.
• US Dollar Index holds above 91.00 as US T-bond yields recover modestly.
• Investors await European Central Bank's (ECB) policy announcements.

After closing the second straight week in the positive territory, the EUR/USD pair preserved its bullish momentum on Monday and advanced to its highest level since early March at 1.2048 before going into a consolidation phase. As of writing, the pair was up 0.43% on the day at 1.2035.

Earlier in the day, the data published by Eurostat revealed that the Construction Output in February declined by 2.1%, compared to analysts' estimate for an increase of 0.2%, but failed to trigger a noticeable market reaction.

In the meantime, the USD selloff that intensified amid slumping US Treasury bond yields remained intact on Monday and the US Dollar Index (DXY) dropped to its worst level in nearly seven weeks at 91.03. However, with the benchmark 10-year US Treasury bond yield staging a rebound and rising more than 1% in the second half of the day, the DXY managed to limit its losses and was last seen falling 0.55% at 91.10.

Later in the week, the European Central Bank's policy announcements will be watched closely by market participants. 

European Central Bank Preview: Five reasons for Lagarde to lift the euro.

EUR/USD outlook

Credit Suisse analysts think that EUR/USD could continue to push higher with a daily close above 1.2027  and target March high and 61.8% retracement of the 2021 fall at 1.2103/13. "A reversal back below 1.1992 followed by a clear break of support at 1.1950/46 would quickly turn the risks lower again for a fall back to 1.1928/23, then 1.1883," analysts added.

Additional levels to watch for