FXStreet notes that EUR/USD probe of 1.19 fizzled out. According to economists at Westpac, ranges are likely to remain intact near-term in quiet summer trade but the European Central Bank (ECB) vs Federal Reserve (Fed) over Q3 suggests selling into rallies. 

“Mid-summer markets argue against a sustained move in either direction for the euro, though it seems at greater risk multi-week of a downside break if Fed QE tapering remains on track. Obviously Friday’s US employment report could be decisive in this regard.”

“European new covid case trends are overall encouraging, albeit with some eye-catching variation e.g. a surge in France but very low cases in Germany.”

“Assuming the US dollar fares reasonably well in the week ahead, then the contrast will remain intact between the Fed and the dovish ECB, where balance sheet expansion continues apace.”

“EUR/USD seems set to probe the lower end of July’s ranges, around 1.1750/70.”