Will the ECB's euro bashing work?

Euro to keep rising unless ECB delivers: Pro

The euro has taken a beating from comments by the European Central Bank that currency strength is a concern, but it will only stay down if action follows the tough talk, analysts say.

The euro tumbled over 1 percent from a 2-1/2 year high on Thursday after ECB chief Mario Draghi said the strengthening euro was a "cause for serious concern." He suggested the central bank would ease monetary policy next month after holding its key rate steady at 0.25 percent in May.

Read MoreEuro rise 'cause for serious concern': Draghi

In early Friday trade, the single currency hovered around $1.3835, holding near the lows hit the previous session.

"The reality is that unless the ECB actually follows through on its commitment to ease come June, the euro will stay where it is or potentially move higher," Jacob Kirkegaard, a senior research fellow at the Peterson Institute for International Economics in Washington, told CNBC.

"We still have quite a lot of portfolio flows into the euro area," he added. "Essentially investors are saying we have uncertainty in emerging markets, we still have low interest rates in the U.S., the rally in peripheral European countries has more room to go, and there's a current a current-account surplus, all of which pushes the euro up regardless of what the policy makers do."

The euro has been on a broad upward trend since mid-2012, gaining almost 15 percent against the greenback. It is up almost 1 percent so far this year.

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In a research note published Friday, analysts at ANZ bank recommended buying into current euro weakness as capital inflows into the euro area "remain very strong."

"Whilst the euro has sold off, its downside is likely to prove limited," they said. "Expectations of a rate cut at next month's policy meeting on 5 June should provide support to euro area financial assets which will in turn support capital inflows."

Chris Ratcliffe | Bloomberg | Getty Images

Analysts expect the ECB will probably lower its main lending rate between 10 to 15 basis points at the June meeting and possibly move to a mildly negative deposit rate.

"Arguably, the ECB needs to be more aggressive if it wants to engineer a bigger fall in the currency," said Ray Attrill, co-head of forex strategy at National Australia Bank.

"Of course what they'll say is that euro strength is one of the reasons that inflation is lower than it wants so there is a need to respond with easing. The risk is they will make clear that they are not targeting the exchange rate, but a minor move in rates may not be enough to trigger additional downward momentum in the euro," he added.

Annual inflation in the 18-member euro zone picked up slightly in April to 0.7 percent, but remains way off the ECB's target of close to 2 percent.

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For some currency analysts, there was reason to heed the ECB's words.

"Some investors may be tempted to buy euros on the back of this decline but it's a bad idea. The ECB made it known that they are preparing to increase stimulus and no other major central bank is in the same position," said Kathy Lien, managing director at BK Asset Management, said in a note. "At a bare minimum, we are looking for a minimum move down to $1.3700."