The EURUSD pair has been nursing losses for a fifth day in a row on Monday, with the euro remains under the selling pressure despite a better risk sentiment in the global financial markets after the Chinese central bank unveiled a reform of the LPR formation mechanism in order to make borrowing costs lower for companies and support the local economy, suffering from the ongoing trade war with Washington.
The common currency registered lows around 1.1066 last week and has settled around 1.11 on Monday. The pair may struggle to regain the upside momentum in the days to come due to a number of risk events, from FOMC and ECB meeting minutes to Economic Policy Symposium in Jackson Hole and fresh PMI data later in the week. Less dovish than expected comments from the Federal Reserve could lift the dollar across the board, which would be a negative scenario for the euro.
Moreover, citing the latest weak economic data out of the Eurozone, including the German GDP contraction in the second quarter, the ECB could send a dovish signal to global markets. In this scenario, EURUSD could even challenge the lows around 1.1025 after a possible break below 1.1060.