Investors are at a crossroads. On the one hand, the latest statistical data signal the restoration of economic activity in the world, which contributes to a return of risk appetite. On the other hand, the emergence of new foci of coronavirus infection in the United States makes market participants think about the likelihood of a new wave of the pandemic.

The euro is close to showing the best two months against the greenback in a year and a half. Thanks to hopes for a joint EU response to coronavirus and a quick recovery in the region, the euro managed to strengthen by about 2.5% since early May.

The EUR / USD pair was able to win back some of its recent losses and headed for the round mark of 1.1300.

The euro was supported by news that the German Constitutional Court allowed the Bundesbank to independently decide on participation in the ECB's asset purchase program.

In addition, the epidemiological situation in Europe seems more favorable than in the United States.

Against this background, the USD index retreated from the weekly maximum reached on Friday and slipped to 97.1 points.

Although the greenback is cheaper relative to most major currencies, according to some experts, it will strengthen against the backdrop of an increase in the incidence of COVID-19 in the United States and other countries.

"The more stringent and widespread the new restrictions are, the slower the US economy will recover, and the higher will be the demand for the safe-haven assets, which include the US dollar," CBA analysts said.

"We continue to expect a steady recovery in the global economy, which should support the strengthening of the euro in the coming months. However, at this stage, we would not recommend long positions in EUR / USD for investors who choose "shorts" for the dollar, and for whom, in our opinion, the yen remains the best option, "noted The Goldman Sachs strategists.

"Given the high sensitivity of the euro area to world trade, we expect that global uncertainty around the pandemic will restrain growth in EUR / USD," ANZ Bank experts said.

The previous five-day period turned out to be quite volatile for the main currency pair, however, there will be plenty of opportunities for movement this week. Fed Chairman Jerome Powell will deliver a speech on Tuesday. On Wednesday, the ISM manufacturing index will be published, and on Thursday, ahead of Independence Day in the United States, a report on the American labor market will be released.