The market has witnessed cautious trading on EUR/USD at the start of the week, and a further movement is to be seen. The pair is likely to stay at current levels in the short term.

Unlike the euro, the greenback is again on the winning streak. On Monday, March 21, EUR/USD trades at 1.1040, repeating the performance of the previous week. Buyers will try to protect support although a bullish scenario is still relevant.

In the light of prolonged geopolitical uncertainty surrounding Ukraine, investors are turning to USD as it remains a popular safe haven. Therefore, demand for the greenback is increasing, adding pressure on the euro. Analysts foresee a steep rise in the dollar.

In the event of escalating tensions between Russia and Ukraine, demand for the greenback will peak. However, it is unlikely to remain strong, experts believe. The dollar's bullish bias may turn bearish. Most market participants have already closed their long positions on USD. If this trend gets deeper, the dollar will become weaker.

The long-term upside potential of USD is making many analysts cautious. Some of them think the greenback is approaching the so-called "point of no return." Its role as the only global currency irreplaceable in international settlements is now in question. A number of countries, including Russia, Turkey, Brazil, India, and China, have recently switched to national currencies in mutual settlements. In this light, the dollar has declined in importance, experts emphasized.

Concerns are growing over rising inflation in the United States. Even a slight decrease in the share of USD and US securities in international trade and foreign reserves could harm the global economy. Against this background, new inflation hikes in the US and a fresh round of the global financial crisis could take place. Therefore, the greenback could get caught in a financial trap, which is very difficult to get out of.