Euro rose in European trade on Monday against a basket of major rivals, amid attempts to recover from three-week lows as investors await more clues on the future of European interest rates.

Some analysts believe the euro might fall below 1.08 on prospects of an interest rate cut in June by the European Central Bank, while the Federal Reserve could maintain interest rates at current levels for an extended duration.

EUR/USD

EUR/USD rose 0.15% to 1.0823, after losing 0.5% on Friday, the second loss in a row, hitting a three-week trough at 1.0801 amid risk aversion.

Euro lost 0.75% against the dollar last week, the second weekly loss in a row on renewed concerns about the Europe-US interest rate gap.

Downward Outlook

Scotiabank analysts said in a recent memo that short-term technical analysis indicates a likely decline, potentially below $1.08.

Geoffrey's Groups forex analysts said the EUR/USD pair is primed for a potential drop towards $1.0700.

Crdit Agricole forex analysts expect a stronger performance by the dollar compared to euro, which is likely to face multiple headwinds in upcoming days.

Such headwinds, in the form of data, could pressure the ECB to cut interest rates in June, while the US economy continues to prove flexible, which in turn could convince the Fed to delay any potential rate cuts to the second half of the year.