With expectations that the European Central Bank (ECB) will undertake easing measures in June largely factored in by the market, any policy moves could provide the basis for a potentially strong upward eur/usd rise according to charts.
ECB president Mario Draghi said in Brussels last week that "the [ECB's] governing council is comfortable with acting next time [June policy meeting]," boosting speculation that the central bank could take action to shore up growth and keep inflation from falling too low. The eur/usd chart shows the market is moving towards consensus agreement on this announcement and is now ready for a potentially strong upward move.
Many traders are cautious about trading around the release of policy statements and statistical reports as the FX market often moves very rapidly on such announcements. Traders who are long when the market moves down following an announcement find it difficult to exit positions. Usually the risk component of the risk-reward equation increases in news-event trading.
The eur/usd weekly chart suggests the risk around possible easing action at next month's ECB policy meeting is lower than usual. A few chart features support this conclusion.