TD: trading the ECB press conference
TD outlines 3 scenarios for trading EUR/USD around today's ECB press conference which is widely expected to see the ECB staying on hold.
1) Draghi steps back in his firm commitment to expand the ECB balance sheet by a targeted size of 1 trillion euros
Probability: 75% - EURUSD likely breaks through 1.2570, but meets resistance at 1.2610-1.2625.
2) Draghi downplays expectations of corporate bond buying
Probability: 15% - EURUSD challenges 1.2625. A break higher would open up a move to 1.2690-1.2700.
3) Draghi confirms the target for the ECB to expand its balance sheet by 800 billion euros and more.
Probability: 10% - EURUSD potentially breaks through 1.2440 with a move to 1.2400 possible.