Bank of America Global Research maintains a short EUR/USD position via options into this week's July FOMC meeting.

"EUR/USD ointo At the time of writing, the OIS curve is pricing 9bp for the July FOMC (36% chance of a rate hike). While the recent inflation data was soft, the surge in energy prices is likely behind this recovery in July probability.

 We expect the Fed to stay on hold, but it seems prudent to price in a knife-edge decision. If inflation credibility is paramount, the best way to reinforce this would be to hike preemptively, rather than wait until September," BofA notes.

"We stay constructive USD for 3Q, but the tight call on the July FOMC - both the rate decision and Warsh's press conference - suggests two-way risks near-term. While the USD strengthened last week, partly driven by higher US rates, the narrowing of US data surprises vs. the rest of the world may restrain upside for now, short EUR/USD via put spreads remains our preferred USD long expression,"Bofa adds.