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Forex pairs in this Article » EUR/USD (Barcelona) - Greg Anderson, Global Head of Currency Strategy at BMO Capital Markets notes that markets are mostly in look-ahead mode as they await the ECB decision at 07:45 EST and then the press conference at 08:30.

Key Quotes

“By our read, most market participants don’t expect a rate cut, but they would give it a 30-50% chance. Economist surveys show an even smaller likelihood of an outright rate cut (to the Main Refinancing Rate and/or the Deposit Rate) at this meeting.”

“However, a dovish shift in language in the ECB’s general statement and ECB President Draghi’s remarks in the press conference is fully expected. Confirmation of the expected dovishness would probably push EURUSD back below 1.3500 but it would take a rate cut to establish new cycle lows.”

“A lack of dovishness on the part of the ECB would see EUR/USD above 1.3600 on an intra-day basis and could renew the uptrend in EUR/USD. Presumably the ECB knows that possibility and would prefer to avoid it.”
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