Euro May Get Hit Ahead Draghi Speech

FX:EURUSD   Euro / U.S. Dollar
EURUSD got an unexpected support from the USA, and managed to rise to 14-month high at 1.1564.
The thing is that the first reform that Trump was pushing through the Congress failed – two more senators came out against the bill, smashing the chances Obamacare would be reformed in the nearest future.
What does it mean for the market? It means Trump would have hard time pushing any other reform in such an unfavorable environment. And if so, the long-term appreciation of USD backed by excessive optimism on huge infrastructural reforms had no any fundament under it. And if so, it’s time to sell American currency.
However, in pair with euro we need to be cautious, as the ECB meeting is looming. Market has already priced-in the positive tone of Mr. Draghi coupled with hints on future stimulus removal. And this is the first step to rates increase. And this is a good argument to buy euro , except for one fact.
The ECB is very conservative, and doesn’t like when market is overheat. That’s why there are good chances to see the chairman would try to cool down the markets. And it may trigger a huge selloff of EUR.
Under this scenario, current levels of EURUSD look very attractive for entering the market with shorts, and the nearest target may stay at 1.1440.
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