The European Central Bank announced some measures to ease monetary policy two weeks ago. The euro had been on a downtrend since May and by these measures the ECB increased its support to the economy.
The result?
Two weeks later, EUR/USD stabilized just above 1.35.
This week’s Eurozone economic calendar will be an important test for the euro because investors will be watching to the data in order to give confirmation on the need for additional easing.
Economists are not expecting major changes in economic activity but after the plunge in investor confidence (ZEW survey), the risk is a big disadvantage of these reports.
The rate of the EUR/USD will depend mostly on Eurozone data because the U.S. economic calendar is busy with Tier 2 economic reports. The Fed needs will probably start talking about normalizing monetary policy in September, when the central bank updates its forecasts and Janet Yellen gives a press conference.
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