The European Central Bank (ECB) President Mario Draghi’s speech is expected to be closely eyed in a data-light European session ahead. Draghi is due to deliver the opening address at the ECB and Its Watchers conference in Frankfurt. His speech is scheduled at 0800 GMT and is expected to last for 40 minutes.
No surprises are expected as ECB's Draghi is likely to reiterate the dovish message delivered three weeks ago. “Draghi had struck a cautious tone on Eurozone economy while pushing out rate hike plans to 2020 and could reiterate that message today, as there hasn't been a marked improvement in the economy in the last few weeks,” Omkar Godbole, Analyst at FXStreet, noted.
At its March 7th monetary policy meeting, Draghi noted the following key quotes on the economic outlook.
“Signs of domestic factors dampening growth starting to fade.
Weakening in economic data points to sizeable moderation of pace of expansion.
Geopolitical factors, protectionism weigh on sentiment.
Points to vulnerabilities in emerging markets.
Underlying inflation muted.”
How could it impact EUR/USD?
According to Haresh Menghani, Analyst at FXStreet, “Weakness below mid-1.1200s will reaffirm the negative outlook and accelerate the fall back towards the 1.1200-1.1190 region - marking 61.8% Fibo. level of the 1.0341/1.2556 larger upswing. On the flip side, any meaningful attempted recovery now seems to confront some fresh supply near the 1.1300 handle and is followed by the 1.1325-30 zone, above which a bout of short-covering could lift the pair back towards a six-month-old descending trend-line resistance near the 1.1400 round figure mark.”
Key Notes
Brexit and ECB speak amongst market movers today – Danske Bank
EUR futures: room for extra downside
Source: Italian Govt reportedly set to revise 2019 GDP growth forecast to 0.1% - Reuters
About Draghi’s speech
As part of his job in the Governing Council, he gives press conferences in the back of how the ECB observes the current European economy. President's comments may determine positive or negative the Euro's trend in the short-term. Usually, if he shows a hawkish outlook, that is seen as positive (or bullish) for the EUR, while a dovish is seen as negative (or bearish).
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