EUR/USD: Focus on Christine Lagarde as 25 points cut is done deal

The single European currency remains stable near 1.14 level in anticipation of the European Central Bank meeting where the decision to cut interest rates by 25 basis points is fully expected.

The recent drop in eurozone inflation below the 2% target could bring some bets to the table on the possibility that President Lagarde will keep interest rates steady, but such a move is highly unlikely and would be a shock to markets if it happens.

So, in the event that there is no big surprise, all interest is expected to be focused on President Lagarde's speech that will follow the announcement, with investors trying to decipher possible thoughts about the European Central Bank's next moves.

The expected 25 basis point reduction will further widen the gap in key interest rates between the dollar and the euro, which is currently the main bulwark against the pressures that the US dollar has faced in recent months, mainly due to President Trump's policies and the concern it has created among holders of US debt.

Trade war, yields on US government debt securities and the Ukrainian front continue to be high on investors' agendas, influencing international stock markets and the course of the foreign exchange market.

President Trump's controversial personality and enigmatic policies continue to worry investors, and despite the temporary lull, the risks from his frequent policy changes remain.

The scenario that the exchange rate will remain between some critical levels between 1.10 and 1.16 remains in play for the near future  and without some big surprise in the next two days we will hardly see any significant levels being broken.

The European Central Bank meeting and speech by President Christine Lagarde are expected to dominate today's agenda, and without any major surprises on the table, investors are expected to remain cautious ahead of tomorrow's announcement of the very important data on new jobs in the United States, which often act as a game changer.