Archived IMT (2009.04.01)

Euro traders unlikely to push the currency above the $1.34 ahead of Thursday's vital rate decision from the ECB and the subsequent press conference from JC Trichet. Consensus expects a 50-bp rate cut, but increased chatter of a shock rate cut of 75-100-bps is now doing the rounds. Such a scenario would have a negative knee-jerk reaction for the euro, and would cause a break below the key $1.3080 support--the 50% retracement as well as the trend line support from the March 4 low. Low likelylihood of such scenario.