The reaction in the FX markets to last Thursday’s comments by the ECB President was odd: she was dovish, yet the Euro climbed. That suggests more near-term upside for the currency.
This session’s monetary policy announcement by the European Central Bank will dominate trading in EUR/GBP near term, and there’s a risk the pair will fall as the ECB stays determinedly dovish.
Trader confidence remains high and that means current trends, in particular stronger stock markets and a weaker US Dollar, will likely persist for a while yet.
The European Central Bank will consider it a job well done if there is no movement in EUR/USD or the Euro crosses before, during or after Thursday’s policy announcements by its Governing Council.