# Citigroup Advises Selling Rallies in Euro Ahead of ECB Meeting
## European Central Bank Policy Meeting Overview
The European Central Bank (ECB) is set to hold its latest policy-setting meeting this week, and market experts at Citigroup are advising investors to approach the event cautiously. Here’s what you need to know:
### Market Expectations
– Markets are currently pricing in approximately 49 basis points of easing over the remaining two ECB meetings scheduled for this year.
– Despite this expectation, analysts at Citi believe that dovish repricing around Thursday’s event may be limited.
### Tactical Approach
– Citi sees a potential for a short-term bounce in the Euro (EUR) following the ECB meeting this Thursday.
– However, they recommend fading this rally as November approaches and the risk premium related to the upcoming U.S. election becomes more apparent.
### Citi’s Strategy
– The bank’s FX Positioning data suggests adding to EUR shorts, indicating a bearish sentiment.
– Citi remains short on EURUSD in both spot and options, with a focus on selling any retest of the 1.10 double top neckline.
### Technical Analysis
– At the time of writing, the Euro was trading flat at 1.0892, showing a nearly 2% decline over the past month.
– Citi’s target for EURUSD is 1.08, with a potential overshoot towards 1.07 if resistance at 1.1050 holds.
## Analysis
In summary, Citigroup’s advice to sell rallies in the Euro ahead of the ECB meeting is based on several factors:
– Anticipated easing by the ECB in the coming meetings.
– Risk premium associated with the U.S. election.
– Technical analysis pointing towards a bearish trend in EURUSD.
For investors, this information is crucial as it provides insights into market sentiment and potential trading opportunities. By understanding the rationale behind Citigroup’s strategy, individuals can make informed decisions about their investments and manage risks effectively. This analysis highlights the interconnectedness of global events and financial markets, emphasizing the importance of staying informed and adapting to changing conditions in the investment landscape.