The EUR/USD pair surged on Monday (July 22nd), gaining more than 0.50%, as the US dollar weakened, pressured by falling US Treasury yields and trade uncertainty ahead of the August 1st deadline. This triggered an outflow of the greenback, as the pair traded at 1.1694 after bouncing from a daily low of 1.1614.

The market mood was upbeat as investors awaited earnings reports from two megacap companies in the United States. Trade tensions between the European Union (EU) and the US have escalated as EU diplomats explore a broader range of retaliatory measures against the US, as the chances of reaching a deal diminish.

The European Central Bank (ECB) is expected to keep interest rates unchanged at its July 24th meeting, following a series of rate cuts, although attention is focused on next week's Federal Reserve meeting.

Tensions surrounding Fed Chairman Jerome Powell continue to mount, following Congresswoman Anna Paulina Luna's formal accusation that the Fed chairman committed perjury on two separate occasions, both stemming from discussions regarding the long-scheduled renovation of the Fed's Washington, DC, headquarters.

This week, the European Union's economic agenda will feature Consumer Confidence, the July Flash PMI, and the European Central Bank's (ECB) monetary policy decision. In the US, the economic agenda will include the release of US housing data, the S&P Global Flash PMI, Initial Jobless Claims, and Durable Goods Orders. (alg)

Source: FXstreet