01.09.201410:07:00UTC+00Euro Faces Risk of Short Covering

True, Draghi has stepped up his dovish tone but it is wrong to expect too much from the ECB at this week's meeting.

The market remains heavily bearish on the EUR, with speculators short EUR positions staying near their highest in two years.
As such, the single currency could see a short covering rally if ECB announcements fall short of expectations.
Kit Juckes, Global Head of Currency Strategy at Societe Generale, explains:
"EUR non-commercial short on the CFTC are at their highest level since soon after Mr Draghi's 'whatever it takes' speech two years ago. Clearly, the market is in danger of disappointment if the ECB meeting on Thursday fails to deliver more than dovish rhetoric and promises of action."
After Thursday, the focus will turn to the Fed, and the dollar will see a next leg up higher if the non-farm payroll figure surprises on the upside.