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What will Draghi deliver on Thursday’s ECB decision? EUR/USD is relatively tight in range towards this event and markets may be under positioned for a move, according to the team at BNP Paribas.

So, they recommend staying short:

Here is their view, courtesy of eFXnews:

Market participants appear reluctant to position aggressively for ECB easing this week, notes BNP Paribas.

“Our BNP Paribas positioning analysis suggesting that EUR shorts remain quite moderate at -9. This may reflect conflicting signals from ECB policy makers in recent weeks, with council member Lautenschlaeger speaking out forcefully against sovereign QE over the weekend,” BNPP argues.

However, BNPP thinks the comments from President Draghi and Vice President Constancio over the past two weeks are likely to prove more instructive.

“We also note that EUR inflation expectations have continued to collapse in the aftermath of last week’s OPEC meeting, putting more pressure on the ECB to respond this week,” BNPP adds.

BNPP maintains a short EUR/USD poistion in its portfolio from 1.2520 targeting 1.18.  

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