EUR/USD seen under pressure on ECB – Danske Bank

Senior Analyst at Danske Bank Morten Helt noted the single currency should remain under scrutiny in light of the ECB event later today.

Key Quotes

“EUR/USD edged lower yesterday as US 10Y yield stayed above the 3% mark providing some long-awaited rate support to USD more broadly. Today’s ECB meeting is clearly key for the majors and while we look for Draghi to strike a dovish tone, the market is likely already positioned for this given the continued downside data surprises in the euro zone lately”.

“With positioning likely still stretched on EUR/USD longs, risks remain on the downside for the cross heading into today’s meeting, but, at the same time, there is a non-negligible risk that markets could be disappointed that Draghi comes across less soft than hoped for”.

“A key resistance level to watch is the 1-March low of 1.2155, and we would not rule out a break of this during the press conference; that said, it will require a more significant change in tone than we look for to move through the 2017 high of 1.2092”.