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How to Trade the European Central Bank Meeting

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Ready for the European Central Bank meeting?

The fun will start soon, and word on whether the central bank is cutting interest rates will come Thursday morning. .

Recent downbeat economic reports have given the bank plenty of motives to inject new stimulus in the form of a rate cut, but it's not clear the ECB will actually make a move, according to Todd Gordon, co-head of research and trading at Aspen Trading Group.

"There are certainly plenty of reasons for the ECB to want to cut rates," he told CNBC's Simon Hobbs. "I'm positioning short," he says, ready to take advantage of a weaker euro, "but I don't think they're going to cut this time around." That's more likely to come three months later, he says.

So why the short positioning?

"We saw poor German data, and that's obviously the core of the European Union," Gordon says. And then there are the technical factors. Gordon thought that the euro would find support when it passed 1.3120, but "it didn't hold the support." In terms of technical factors, that's a red flag.

So Gordon wants to sell the euro against the dollar, entering the trade at 1.3050. He recommends a stop at 1.3150, and says a target of 1.2950 is reasonable.

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