From the FXWW Chatroom – Ahead of ECB I expect EUR to squeeze back up toward 1.1450/60. We saw a wave of selling from CTA’s and HF who suddenly felt very underweight. We also saw US corporate demand, which was partially offset by EU corporate supply, and that dynamic warrants monitoring in the near term as it’s not what you’d expect. In terms of the ECB itself, Draghi is likely to reiterate strong wage gains – but a slow pass through to headline inflation. We should also see some downgrade to the growth outlook – but that might seemingly be more in the price after yesterday’s soft PMIs. Draghi will want to keep the meeting as boring as possible – so trading EUR today will be more a product of managing the knee jerk moves. I have covered my cash shorts, and bought the cash against my 1.1400 puts. I’ll look to scale out above 1.1440 and re-establish cash shorts above 1.1480. Support now sits at 1.1370 and 1.1320/30. Resistance sits at 1.1440 and 1.1480.
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