Draghi tries to stay dovish
The market can sense when a central banker has played his final card. Draghi is still talking about the potential to do more. He is carefully avoiding anything that could be a hint of a hiking down the road.
The market is basically calling his bluff.
The market knows that his next move is to tilt more-hawkishly, more-optimistic.
So for the euro traders, it's only a matter of time. He's holding a beachball underwater and will lose his grip. Whether it's at Jackson Hole, in September, or later doesn't change what will happen when the time comes -- the euro will rise.
At some future time, he will shift. The message will change to broad optimism and a confident signal on inflation.
So look at the risk-reward. If he stays dovish, what's the downside in EUR/USD? 200 pips? Maybe a bit more if US inflation picks up. What's the upside if/when he signals something hawkish? 1000 pips?
So if you can sweat it out, a payday is only a matter of time.
