Profit in the run-up to the end of trading in Europe, provide some support for the euro, but the overall mood is negative, and market speculation that the ECB, whose meeting was scheduled for this Thursday, can lower projections for GDP growth rate. Such an event will only strengthen the view that the ECB's attention shifts from inflation to the sluggish economies in the region, and probably will support the growing expectations of new stimulus measures including a reduction in the rate of refinancing. At the moment curve EONIA assumes a 20% chance to reduce rates by 0.25% at the next meeting, taking full account of this event by the end of this year and another drop to 0.25% by May 2012. Euro has still kept in the range of active and drop the last few days gives occasion to reflect on some profit taking. However, after the aggressive sale of this severe Rally pair is a negative sign for the bulls, and the predominant risk is re-testing support at around $ 1.40 in the short term. Meanwhile, developments in financial markets and developments in Europe (in particular, is very disturbing signals from the banking sector) and in the wider world economy suggest a growing risk to the euro, less favorable for which acquired and the technical picture. Risks of a break below $ 1.40 in recent years has increased, and their materialization will be evidence of capacity to move the pair to $ 1.38 initially, and then to $ 1.35 / $ 1.34.
