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This is a significant week for global FX, with the Federal Reserve's policy update on Wednesday followed by Friday's all-important U.S. jobs report.

The impetus for the Euro to Dollar exchange rate (EUR/USD) will therefore be driven by the Dollar side of the equation, particularly now that the European Central Bank's October policy meeting is out of the way.

"We are doing something we don’t usually do and going with a directional USD bet for our trade of the week," says Elsa Lignos, Global Head of FX Strategy at RBC Capital Markets.

Of particular excitement for financial market participants is the prospect of a 'pivot' at the Federal Reserve, whereby they signal Wednesday's expected 75 basis point hike is the last of its kind, with a slower pace of hikes ensuing from December onward.

Some analysts say this could underscore the notion that the peak in the U.S. Dollar is now in, something referred to in finance circles as the 'pivot'.

But as we note here, analysts at Bank of America are cautious that such a pivot will actually result in material USD weakness.

For Lignos and her team, the view is a short-term one, after all this is a "trade of the week".

"The FOMC decision on Wed is nailed on at 75bps, and given we won't be getting updated forecasts or dots, all that is left to guide markets is the press conference. In previous months, FOMC rhetoric was notably consistent – all reinforcing the same hawkish message," she says.

Lignos is looking for this week’s message "to be more nuanced – Powell is bound to be asked about December & a step down in pace. To retain optionality he almost has to deliver a less hawkish message (50bps is on the table)".

"We think it's worth a shot positioning for another break above parity," says Lignos.

RBC Capital are targeting a move to 1.0140 from 0.9917.

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