EURUSD on the defensive ahead of ECB meeting and trade talks

The single currency set for a second week of losses, with EURUSD has been trading with a mild bullish bias on Friday, after a brief break below the 1.16 handle yesterday. The dollar demand has abated somehow after Trump’s verbal interventions, but the overall sentiment around the greenback remains fairly robust. The ECB July meeting will take place next week. But the euro will hardly get a boost from this event as the macroeconomic picture barely changed over the last month, and the first rate hike is not expected before the fall of 2019. So, the reaction to the meeting and Draghi’s comments is going to be quite muted. Meanwhile, the general dollar sentiment will continue to set the tone for the pair. The buck remains within a bullish trend – not least due to the lingering trade jitters. So the widespread USD demand will accelerate in case of escalation of the situation. Therefore, the EURUSD pair remains vulnerable to further losses, especially against the backdrop of the upcoming arrival of the EU officials to Washington next week for trade talks.

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