EUR/USD has surrendered part of last week’s gains to the 1.1070 area, retreating nearly a cent ahead of the European open on Monday. “This week, the key event in Europe is the ECB meeting where our call of a 10bp rate cut, frontloading of QE and introduction of a two-tier deposit rate system are close to consensus. We expect EUR/USD to be under pressure ahead of the meeting as the theme of ECB-Fed divergence plays out following stronger US data and the reduction in EUR shorts”, suggested Arne Rasmussen, Chief Analyst at Danske Bank. In addition, Karen Jones, Head of FICC Technical Analysis at Commerzbank, argued the pair “shot higher on Friday towards the 200 day moving average circa 1.1047. Between here and 1.1087 (September low) is quite a pivot point. Ideally this will again provoke failure and we continue to target 1.0560/1.0457 (the December 2015 and March 2015 lows)”. For more information, read our latest forex news.