Despite the market already pricing a 40% probability of a 10bp cut this week, more than one 10bp cut by September and close to 20bp overall easing by the end of this year, we see a downside risk to EUR/USD coming from the ECB meeting this Thursday. This is because: (a) The ECB is likely to change the forward guidance and signal the upcoming cuts (in September and potentially beyond), thus cementing the markets' dovish expectations, and (b) President Draghi is likely to deliver a dovish press conference, with a potential hint at QE (see ECB Preview for more details). The latter in particular should be a negative ... (full story)