EUR/USD took advantage of the dollar's weakness to make a move to the upside. What's next? A lot depends on the ECB.

Here is their view, courtesy of eFXnews:

EUR/USD: Mess About In Range Before Pushing Towards 1.1620 Tech Target – SocGen

Societe Generale FX Strategy Research notes that the question this week is whether a market with what seem stretched positions in both bonds and FX, can really take EUR/USD on upwards without some kind of correction?

In that regard, SocGen notes that the main focus in Thursday's ECB meeting will be on the lack of inflation rather than the case for further tapering of the ECB's bond purchases.

“There's clearly some reluctance to rock the boat (both in bond and currency markets) at the start of the summer break,” SocGen adds.

“That leaves us with EUR/USD 1.1620 as the next technical target, while on the downside 1.13 is the key support. Recent experience suggests we won't get to the support line and will just mess about in this range before pushing higher again,” SocGen argues.

EUR: Asymmetric Risks From This Week's ECB Statement – Barclays

Barclays Capital Research argues that while the ECB is widely expected to leave its policy settings unchanged on Thursday, the statement language represents asymmetric risks to the EUR.

“A confirmation of the hawkish language introduced by President Draghi in Sintra (Portugal), when he suggested that “the central bank can accompany the recovery by adjusting the parameters of its policy instruments” should see only a limited sell-off in short-end interest rates, with very modest upside risks for EUR/USD.

The rates market, for example, already implies almost 10bp of deposit rate hikes over the next year versus less than 3bp prior to President Draghi's speech, and throughout this time EURUSD has appreciated about 2.5%,” Barclays argues.

“Dovish language, on the other hand, could see a more EUR marked retracement as investors reassess expectations of both deposit rate hikes and the pace of asset purchases,” Barclays adds.