According to Strategist at Westpac Richard Franulovich, the pair could face further downside pressure into and post the ECB meeting.
Key Quotes
“A thicket of support for EUR/USD in the 1.07-1.08 range likely provides at best only fleeting assistance, these levels likely to be challenged into the 10 March ECB meeting”.
“A 10bp deposit rate cut is more than fully priced and further out a cumulative 30bp in cuts through year’s end is discounted”.
“Caution understandably reigns supreme around the risk of underwhelming expectations given the ECB’s December debacle”.
“We assume Draghi will be hypersensitive to the risks of disappointing and with even Weidmann reportedly on board for more easing, Draghi should have an easier time at least matching and potentially over-delivering”.
“Onward and downward for EUR into and in the immediate wake of next week’s ECB meeting”.
(Market News Provided by FXstreet)