Whether the Dollar will be able to defend the gains made over the past weeks will depend heavily on how clearly the Fed leaves the door open for future rate hikes and of course on whether and if so to what extent the ECB closes the door to further rate hikes on Thursday.

In view of the high uncertainty about how quickly and to what extent the rate hikes already implemented will affect the real economy in the US and in the Eurozone it is quite plausible that ECB and Fed do not want to commit to a predetermined path at this stage. That means it is possible that by the end of the week we will be none the wiser than now and that EUR/USD levels around 1.07/1.08 might turn into a new ‘wait and see’ level.