The ECB is more optimistic on growth but the downgrade of inflation projections hurt the euro. What’s next? Here is their view, courtesy of eFXnews: Danske Bank FX Strategy Research argues that today’s message from the ECB is not going to be a key catalyst for further EUR/USD upside for three reasons. “First, ECB rate hikes will be deemed far away by the market as long as euro area inflation struggles to tick higher – and a first rate hike needs to be eyed in order for the upside potential in notably EUR/USD from fundamental factors to be unlocked on a larger scale in our view. This should be a story for late H2. Second, speculative positioning has turned net long the single currency and likely some longs were liquidated today, driving part of the initial drop in EUR/USD. If cyclical momentum in the eurozone wears off in the coming months the risk is that sentiment could reverse somewhat and fuel EUR selling again. Third, a Fed that will likely at the meeting next week confirm its determinedness to move on with hikes and balance-sheet reduction down the road could lead markets to reassess the rather soft pricing of the fed funds rate currently in place. As a result, USD strength could return temporarily in the summer,” Danske argues. In line with this view, Danske still recommends tactical short EUR/USD* targeting a move to 1.0850. “We remain tactically short EUR/USD for short-term dip on June reality check – and maintain our call for a summer dip in the cross,” Danske advises. For lots more FX trades from major banks, sign up to eFXplus By signing up to eFXplus via the link above, you are directly supporting Forex Crunch. Yohay Elam Yohay Elam Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts. Yohay's Google Profile View All Post By Yohay Elam Opinions share Read Next GBP/USD could jump if LibDems are kingmakers Yohay Elam 6 years The ECB is more optimistic on growth but the downgrade of inflation projections hurt the euro. What's next? Here is their view, courtesy of eFXnews: Danske Bank FX Strategy Research argues that today's message from the ECB is not going to be a key catalyst for further EUR/USD upside for three reasons. "First, ECB rate hikes will be deemed far away by the market as long as euro area inflation struggles to tick higher - and a first rate hike needs to be eyed in order for the upside potential in notably EUR/USD from fundamental factors to be unlocked on… Regulated Forex Brokers All Brokers Sponsored Brokers Broker Benefits Min Deposit Score Visit Broker 1 $100T&Cs Apply 0% Commission and No stamp DutyRegulated by US,UK & International StockCopy Successfull Traders 9.8 Visit Site FreeBets Reviews$100Your capital is at risk.2 T&Cs Apply 9.8 Visit Site FreeBets Reviews$100Your capital is at risk.3 Recommended Broker $100T&Cs Apply No deposit or withdrawal feesTrade major forex pairs such as EUR/USD with leverage up to 30:1 and tight spreads of 0.9 pips Low $100 minimum deposit to open a trading account 9 Visit Site FreeBets ReviewsYour capital is at risk.4 T&Cs Apply Visit Site FreeBets ReviewsYour capital is at risk.5 Recommended Broker $0T&Cs Apply Trade gold, silver, and platinum directly against major currenciesUp to 1:500 leverage for forex trading24/5 customer service by phone and email 9 Visit Site FreeBets ReviewsYour capital is at risk.