Today's European Central Bank meeting is pretty much a non-event. EUR/USD longs are depending on European Union approval for a recovery fund.
The fund has been driving bullish betting, though expectations seem to go way beyond its potential. The fund may represent closer union, but it is not the mutualization of debt that could truly change the euro's fortunes, and a common bond is as unlikely now as it has ever been.
If agreed in its most bullish guise, where grants and not loans form most of the fund and its total remains 750 billion euros, EUR/USD traders who have sat long for ages will hear nothing new. And there is enough opposition to make the chances good the plan will be watered down or perhaps kicked down the road.
Traders who have staked much cash on bigger EUR/USD gains may be disappointed. With EUR/USD near its 2020 high, its a good time to book profits.
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(Jeremy Boulton is a Reuters market analyst. The views expressed are his own)
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.