Expect Draghi To Prevail; Staying Short EUR/USD targeting 1.18

Expect Draghi To Prevail; Staying Short EUR/USD targeting 1.18

The euro  enjoyed reports that  ECB president has been cornerned by the German orthodox central bankers and that he  can’t push more stimulus.

Is this indeed the case? The team at BNP Paribas thinks that Draghi is set to prevail, explains why, and leaves its low target intact:

Here is their view, courtesy of eFXnews:

The EUR bounced on Tuesday after a Reuters report suggested a number of Governing Council members were uncomfortable with President Draghi’s management style and the push for further policy easing, notes BNP Paribas.

Past experience suggests that Draghi has been successful in pushing through measures opposed by the ECB hawks, including the OMT, negative rates and asset purchases. Our view is still firmly in favour of a dovish outcome this week,” BNPP argues.

While the ECB may not yet be in a position to announce a large scale QE, if Draghi clearly commits to reach the balance sheet goal and lift inflation expectations, the EUR will weaken,” BNPP adds.

BNPP maintains a short EUR/USD position from 1.2520, targeting a move down to 1.18.  

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.