All eyes will be on Mario "The Dragon" Draghi this coming Thursday when the European Central Bank will be holding their monthly press conference, where he will outline the most recent measures the Bank is taking in order to revive the stagnant European economy.
Since the ECB announced the start of QE back in January, which drove the markets up for the first four months of the year and effectively lowered the value of the euro, conditions have changed and the past few months have seen major drops in all the major European markets.
The Stoxx 600 is down almost 15% since April and the German DAX is down almost 20% during the same time period.
Furthermore, the euro is also trading much higher than previously anticipated and while Draghi has previously stated that the exchange rate is not a mandate for the ECB, it is widely known that the strength of the currency is not contributing to the growth they were expecting when first applying QE.
A major concern for the ECB is the lack of inflation, which slipped back into negative territory for September and is considerable setback for the region.
Draghi still has a few options available and after disappointing in last month's conference with no new major initiatives, I feel he will act this time around and provide much needed support to the flailing markets.
The Trades I am focusing on are EUR/USD and DAX.
EUR/USD- start selling at 1.14 with a target of between 80-100 pips.
DAX- BUY at 10,100 with a target of 10,300-10,400.
