EUR faces downside risks around the ECB event – Danske Bank

Pernille Henneberg, Senior Analyst at Danske Bank, sees the euro coming under extra downside pressure in light of the ECB meeting due tomorrow.

Key Quotes

“All eyes are turning to the ECB meeting tomorrow. The EUR/USD is trading on a fairly stable note after the rebound in the wake of the Italian referendum”.

“It may be the calm before the storm, as we think that the ECB may come out on the dovish side versus market expectations, which are more mixed about the stance of the ECB”.

“If we are right, we may see a downward move in the EUR/USD, but we should note that the selling pressure may be more limited due to the EUR short-long USD positions in the markets”.