Euro Cross Pick 06.30.09

[B]My picks:[/B] Flat EUR/USD
[B]Expertise:[/B] Fundamentals and Technicals
[B]Average Time Frame of Trades:[/B] 2 - 10 Days

Following up with the short EUR/USD entry I place at 1.3860 from earlier this month, the head-and-shoulders formation did not play out as expected, and the rise in the euro-dollar during the third week in June triggered a loss of 65pips. As the European Central Bank is widely expected to hold the benchmark interest rate steady at the record-low of 1.00% this week, long-term expectations for higher rates could drive demands for the euro over the week however, the drop in the CPI estimate paired with calls from the Shadow ECB to ease policy further may lead the Governing Council to leave the door open for a rate cut. As a result, I have decided to stay flat against the pair this week, and will wait for the commentary by President Trichet before taking on another EUR/USD trade.