FXStreet (Bali) - RBS FX Strategists are supporting higher levels in EUR/USD this week.
"The push tighter in EU periphery yields on Friday supports our base case scenario that concerns in Portugal are likely idiosyncratic in nature and will not contribute to broader contagion."
"As a result, we expect the EU periphery debt to continue to perform well. With a Yellen testimony that isn’t expected to boost the USD and the EU event calendar lacking major events this week, the horizontal drift in EUR/USD continues – our bias is modestly for higher levels this week, though without strong conviction."
"A sustained downtrend in EUR takes ECB balance sheet expansion and/or greater expectations of outright QE from the ECB – both are likely lacking until September."
"ECB President Draghi speaks Monday, but we expect a similar tone of “prepared to act, but no particular urgency ahead of the tLTRO.” While normally not a focus, watch the mid-month ECB meeting next week (July 16th) as it should include a release of the new ECB 2015 calendar, including meeting dates and minutes release dates, and potentially more specifics about how the minutes will be presented."