FxWirePro: Euro outlook – stay with ECB, avoid the noise

European Central Bank (ECB) chief Mario Draghi today, gave strongest signal ever that ECB will act decisively in December meeting despite opposition from some members like Bundesbank chief Jens Weidmann.

According to Mr. Draghi, ECB will take whatever action the governing council can take with all available instruments under mandate.

There is saying in the market, that every trader in Wall Street is familiar with - "Don't fight the FED". We think it goes with ECB too.

So to trade the Euro, it is best to go with the ECB and any noise should be taken as an opportunity to insert fresh positions. As per past record, ECB has always overwhelmed market with its action, in spite of all expectations...so this time is likely to be similar.

Trade idea -

• Even for traders, who entered late, there could be significant opportunities ahead and Euro is likely to head towards parity. However drop below 0.98 area seems unlikely against Dollar.
   
• Euro/Pound is another nice pair to go short in Euro and play the divergence in monetary policies. Our expectations for the pair to reach 0.62 area from current 0.7.