USD has been quite impulsive with the recent gains over EUR. The pair sank below 1.1250 with a daily close which currently has a greater probability to get retested before the bearish momentum resumes again.

The ECB has been looking forward to solving troubles in the eurozone's economy, in particular a slowdown in the economic growth. At recent press conference, Draghi stated that the governing council discussed several options to restart the QE including a rate cut. Draghi indicates a signal about more stimulus in the speech of Sintra. The market awaits how the governing council will respond at the meeting scheduled for 25 July. There is a scenario that some easing package is coming in September by a rate cut and a restart of QE. On Friday this week, the Eurostat is due to release GDP data for Q2 along with the industrial production data for May. The April figures indicated a weak start for the industrial sector into Q2 and business surveys such as PMIs and IFO index point to further negatives ahead.

The unemployment rate came in to be slightly below the previous print of 7.6% while the retail sales dropped to -0.3% from -0.1%. The manufacturing data of France & Germany was slightly better while Spanish Manufacturing PMI declined from 50.1 to 47.9. Italian retail sales are expected to increase to 0.2% from 0.0%. German final CPI is expected to be unchanged at 0.3%.

On the other hand, US strong NFP report provided the required fuel to the gains of USD last week. The question is still open how long USD is going to sustain momentum. Employment in the US public and private sectors rebounded in June stronger than expected. Market participants cheered upbeat US nonfarm payrolls. On the flip side, a separate report revealed persistent moderate wage gains as well as mounting evidence that the domestic economy was losing momentum. This could still encourage the Federal Reserve to cut interest rates this month. The economy, which has expanded for record 10 years, has shifted into lower gear as the stimulus from last year's massive tax cuts and increased government spending fizzles. The trade tensions are also dimming the economy's outlook by underming business confidence and leading to a downturn in equipment spending and manufacturing. Consumer spending is rising moderately, and the housing market continues to struggle, while the trade deficit has widened again.

This week, Fed Chairman Powell is going to testify on Wednesday. He is widely expected to drop some hints about upcoming monetary policy and rate change decision in the short term. One of the Fed's criteria to decide on monetary policy is inflation. US CPI report is going to be published this week which is expected to edge down to 0.0% from the previous value of 0.1%.

To sum it up, USD found support from the strong employment report. Thus, USD gained momentum versus EUR. EUR/USD is drifting slowly lower.

Now let us look at the technical chart. The price managed to push against the impulsive bearish trend today which is expected to retest off the 1.1250-1.1300 area before the bearish trend continues. The price broke below the trend line support with a daily close which indicates further downward pressure. The price could go lower towards 1.1120 and later towards 1.1050 support area as the bearish bias is unfolding further.