FXStreet (Córdoba) - The ECB meeting due today finds the EUR/USD hovering near its yearly lows, and Pablo Piovano, analyst at FXStreet, comments that a test of the 1.3300 critical level should not be ruled out. According to the analyst, another month on hold is the most likely outcome as the central bank and the markets continue to assess last rate cut and the announcement of the TLTRO.
“As per usual, the door remains of course open for further easing measures should the ECB and the situation in the euro bloc demand so. However, market chatter of a QE-like program has been dying off as of late, relegating this option to a later stage, where fundamentals in the region deteriorate further and/or the TLTRO results are deemed an utter failure”.
“The latest results from the CPI in the euro area (0.4% YoY) will surely give President Draghi enough ammunition to keep the attendees at the press conference entertained today, reinforcing at the same time the case for a dovish rhetoric, as widely expected by the FX community”.
“So, given this probable scenario, a test of the 2014 lows around 1.3340 should not be ruled out, and neither a challenge of the critical 1.3300 mark. On the (less likely) flip side, any upside surprises should be capped by recent highs near the mid-1.3400s. All in all, more of the same”.