Richard Perry, Market Analyst at Hantec Markets, joined Zak Mir, Technical Analyst at Zak’s Traders Café, to discuss the ECB action and the risk ahead in EUR/USD and DAX.
Perry outlined the movement in German 2-year Shatz yields, noting that they were pricing in around 15-20 bps of cut by the ECB today.
While the expectations from Draghi are strong in today’s press conference, Perry believes that the ECB will find it difficult to stand upto the market expectations, and hence there’s a short-covering risk ahead in the EUR/USD and a correction in the DAX.
Perry further adds that the data out of the Eurozone is improving and much has changed since the last ECB meeting.
Adding to the key risk event ahead, Perry believes that Draghi will not only have to deliver to the market expectations but also jaw-bone the EUR lower.
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