Today’s ECB meeting will undoubtedly will be a crucial one, despite the regulator isn’t going to bring any actual changes to its current monetary policy. Despite the economic picture in the euro zone doesn’t warrant a hawkish rhetoric, the recent comments by a number of central bank members point to its readiness for QE removing, probably till the end of this year.
The euro is prepared for a more aggressive regulator tone, but the question is whether it will be enough to fuel a speculative demand. The buck, for example, failed to stage a rally overnight despite the Fed has brought a so-called hawkish hike. It was in part due to the fact that such an outcome had been priced in already.
Therefore, the EUR/USD pair could fail to confirm the rebound above the 1.18 threshold and may even suffer a decline as the strategy “buy the rumor, sell the fact” could come into play should the monetary authorities announce the expected QE end date. A spike during the initial reaction may bring the pair above the 1.1840 area.