The focus of attention this week is the next meeting of the European Central Bank (ECB), which will take place tomorrow.

Amid growing concerns about the global economic slowdown due to the US-China trade war, investors have no choice but to wait for new signals from the ECB for a weaker monetary course, as well as details about the next round of long-term lending to banks (TLTRO), which starts in September .

If the regulator wants to maintain market confidence, it must make it clear that it is considering the possibility of taking more decisive actions, such as a new round of quantitative easing (QE), reports Bloomberg.

"The ECB needs to be proactive against the background of the policy easing expected by the market. This effect can hardly be achieved only by announcing the TLTRO parameters or by changing the interest rate forecast. The signal must be strong and unexpected. That could be a hint that the QE program will be resumed, "said Citigroup representatives.

Will the regulator surprise the market and how will the euro react to the central bank's statements?

"The risk/reward ratio tends to react to the market in favor of a stronger euro. Apparently, the conditions of TLTRO-III will be less attractive than TLTRO-II. We doubt that the regulator will open the door to a greater reduction in rates compared to what it did in April," said currency strategists at Nordea Bank.

"The euro may extend its recent recovery, as the Governing Council of the ECB does not seem inclined to offer overly generous TLTRO. In addition, the idea of a multi-level deposit rate does not yet find a common understanding in the management of the central bank," Credit Agricole believes.

"It seems that the market expects too much from the regulator. It is likely that, following the next meeting, the ECB's tone might not seem dovish. In this case, we could see a sharp jump in the euro, "said Rabobank experts.

"The euro will continue to be in demand among investors, given that at the upcoming meeting, the ECB does not move the expected interest rate increase in the first half of 2020 to a later date and also does not raise the volume of the TLTRO-III incentive program above 720 billion euros," analysts at Morgan Stanley say.

They predict that in the short term the EUR/USD pair will test the strength of the level of 1.1310.

"Breaking through this level will open the way to impressive growth. At the same time, potential attempts to strengthen the dollar against the euro are likely to be limited to 1.1120," the experts said.