The first attempt of the EUR/USD pair to go beyond the range of short-term consolidation of 1.1165-1.1245 in the absence of important news was unsuccessful.

Apparently, investors are now evaluating who is weaker: the dollar or the euro?

The escalation of the Washington and Beijing trade war, the associated easing of the Fed's monetary policy and the increasing likelihood of a recession in the US are all against the greenback. The uncertainty around Brexit, the looming political crisis in Italy, the weakness of the German economy, and the expectation of a serious monetary stimulus with side of the ECB are all against the euro.

"There is a risk that the United States will further increase tariffs on Chinese imports, and Beijing will respond accordingly. This increases the chances that economic growth in 2020 in China and the United States will be lower than the expected 6% and 1.7%," said experts at the international rating agency Moody's.

It is assumed that the growing tension in trade relations between the United States and China, along with a sell-off on US stock markets, will not leave the Fed any choice but to lower the interest rate next month. Traders expect at least two acts of monetary expansion from the US central bank by the end of the year.

However, the market is waiting for steps aimed at preventing an economic downturn not only from the Federal Reserve, but also from the ECB.

Axa Investment Managers believe that only EUR 100-200 billion of monetary stimulus in the form of quantitative easing (QE) from the European regulator is taken into account in the EUR/USD rate. It is possible that this circumstance prevents the "bulls" on the euro from going on the offensive.

According to the forecast of ABN Amro, the ECB will buy monthly assets worth €70 billion for three quarters. Morgan Stanley believes that it will be about €45-60 billion per month for one year. Goldman Sachs estimates the scale of the next quantitative easing program at €300 billion.

If a decrease in the deposit rate by 0.1 basis points in September is most likely already taken into account in quotations, then the size of purchases of assets of the quantitative easing program is not yet fully implemented. Mario Draghi, who is set to leave the ECB presidency in the fall, can loudly slam the door and surprise the market participants with a tremendous monetary stimulus, then the bulls on the euro will have a hard time.

Currently, pressure on the single European currency is being exerted by calls from Italian Deputy Prime Minister Matteo Salvini to hold early elections in the country, as well as expectations of weak data on German GDP and the eurozone.

According to forecasts of the Bundesbank and Reuters analysts, in the second quarter the leading economy of the currency bloc slowed down by 0.1%.

Recall that in January-March, an increase of 0.4% was recorded in quarterly terms. The departure of the indicator to negative territory can be a serious blow to the ambitions of the "European bears", and the principle "would not be worse" keeps them from taking active actions now.

Meanwhile, the rating of Italian Deputy Prime Minister Matteo Salvini is only growing, despite the fact that the politician had earlier refused to fulfill Brussels' requirements (to reduce the budget deficit, increase the retirement age and increase VAT), as this would hit the welfare of Italians.

It is possible that the "League of the North" led by M. Salvini will win the early elections if they do take place. However, this will lead Italy to an even greater confrontation with Brussels and, in general, to an unpredictable ending for the country.

Thus, the EUR/USD pair still maintains a tendency to consolidate. However, the fragile balance, along with Brexit and the aggravation of the political situation in Italy, can disrupt the second quarter GDP report on the eurozone, as well as the July release on US retail sales, which will be released this week.