At 19:45 on June 9, Beijing time, the European Central Bank will announce the interest rate resolution, and then at 20:30, President Lagarde will hold a monetary policy press conference. It is widely expected that Thursday's policy decision and press conference will indicate that the European Central Bank announced the end of its latest and longest lasting quantitative easing program, and provide guidance on the possible direction of future interest rates.

However, what the foreign exchange market is most interested in is the policy actions that the European Central Bank may take in July and September, especially any sign of the rate hike of the eurozone in July.

Joseph capurso, head of international economics at cboa, Commonwealth Bank of Australia, said: "the euro may rise against the US dollar this week due to the hawkish stance of the European bank and the weakness of the US dollar, and may test the upward resistance level of 1.0791."

Capurso and his colleagues said on Monday: "the press conference is very important for monitoring the hint of a more active tightening cycle, and the possibility of the European Central Bank raising interest rates this week is very small."

The euro also paid close attention to the relevant signals about the pace and magnitude of interest rate hikes by European banks. With the change of market expectations, investors and traders expect to raise interest rates by 35 points next month and 125 basis points this year, which will end the long-term era of negative interest rates.

Members of the European Central Bank's Governing Council will discuss whether to raise interest rates by 25 basis points or 50 basis points in July.

Jeremy stretch, head of foreign exchange strategy at CIBC capital markets at Imperial Bank of Canada, said: "the core inflation rate in the eurozone is 3% higher than the latest forecast. Therefore, Lagarde may not completely rule out taking more radical measures than raising interest rates by 25 basis points. Any such recognition should help to continue to support the euro“

In the next few weeks, the trend of the euro against the US dollar will largely depend on the extent to which the European Central Bank released a signal on Thursday, suggesting that it will raise interest rates as the market more expected, or oppose it.

Chris Turner, a Dutch international economist, warned: "In fact, given that Philip lane, the chief economist of the European Central Bank, made a clear commitment last week to raise interest rates by 25 basis points in July and again in September. If there is an unexpected move by hawks this week, it may be necessary for Lagarde to have an open discussion on raising interest rates by 50 basis points. Even in this case, the market expects the euro to raise interest rates by 118 basis points before the end of the year, which means that the euro has limited room to benefit."

Turner and his colleagues also said on Monday: "in our view, the market is more likely to reiterate the policy path of the recent commitment (that is, the interest rate will be increased after July), and the EUR / USD may fall back to the 1.0600 level in the next few days."

Elsewhere, the euro may also be sensitive to U.S. inflation data in May this week, especially whether these data continue to show a month on month decline in price pressure. Previously, Fed policymakers seemed to suggest last week that if the US inflation rate did not continue to decline, their interest rate outlook in the coming months was still likely to become more "hawkish", which means that there is still an upward risk in the US dollar, which will depress the euro against the US dollar.