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Sentiment surrounding the bloc currency remains depressed towards the end of the trading week. When everybody thought the post-Obama risk rally will be the spark, it just vanished after the opening bell in London on Wednesday. The key Greek vote on the new austerity package has followed, a potential market-mover beforehand. Well, nothing happened on this front either, despite the new measures have passed.

Who to blame then? Fingers were pointing to the European Commission, after it's revised down its growth forecasts for the euro bloc and Germany for this year and the next one. Later Comments by ECB's Mario Draghi regarding the implication of the OMT programme with inflation and sovereign financing have only fanned the flames.

Ahead lies the ECB monthly monetary policy meeting, due in the European afternoon. Market participants have already ruled out any modifications in the lending benchmark, although the later press conference by M.Draghi has grown in importance after yesterday's comments. Same rhetoric is also expected… aggregated demand remains subdued, prices are not far from the trend, economic growth continues to be sluggish etc, etc, etc…

True is that the combo of weak PMI prints, soft retail sales, depressed industrial production and rising unemployment - just to mention the most important ones - does not bode well for the fourth quarter figures… does it?.

… What's next after the ECB?

The main event once Draghi's presser finishes would be again the Greek vote on the 2013 budget due on Sunday, which if passes would clear the path for the next tranche of financial aid. At the same time, and since Tueday's final results in the US elections, the 'fiscal cliff' implications are swelling, not a minor issue of course.

Chief Analyst Arne L. Rasmussen at Danske Bank assesses "Nevertheless, we are currently in an environment where risk appetite is under pressure and as always when risk-appetite is being scaled-back investors revert to the US dollar. Considering that the market is not speculatively short EUR/USD to the same degree as was the case two months ago and the quite dovish Draghi comments yesterday, further downside for EUR/USD is likely short term. We do not expect anything from the ECB today, but risk is tilted towards a more soft ECB".

Same direction for the EUR/USD expects Karen Jones at Commerzbank, pointing to a drop towards 1.2470/80 in the near term.

… Poor calendar on Monday

Preliminary Machine Tool Orders in Japan and Wholesale Prices in Germany will be of note at the very beginning of the next week, although the cross would probably be experiencing the aftermath of the Greek vote on Sunday.

Source: Have Euro Bulls Given Up?