Next Week's ECB Not A Big Market Mover; May Cap Downside In EUR/USD, But Won't Add Upside

"The ECB meeting next week is set to focus on the strategic review and not on new policy messages. Media reported that ECB governing council members received documents concerning the strategic review, which will officially be launched next week.  

We expect the ECB to confirm its easing bias and acknowledge its downside risk assessment, but also to note the fading downside risks. We do not expect big market movements on the meeting," Danske projects.

"We do not view the possible change in communication as a game changer for spot EUR/USD....Our 3M view continues to be steady at 1.11 but this shift in communication does somewhat limit downside risk to the forecast. The most notable upside risk to EUR/USD continues to be a substantial fiscal easing agenda making its way forward in the euro area but that remains somewhat elusive as of now," Danske adds.