Fundamental Forecast for Euro: Neutral

– Two-way action in EUR/JPY, EUR/USD very possible this week thanks to BOJ and FOMC.

– ECB speakers dominate calendar (few meaningful data) with Draghi speaking on Thursday.

– Volatility in FX markets is due to rebound over the coming weeks – it's a good time to review risk management principles.

A second tough week in a row for global equity markets after the summer volatility slumber, and the Euro continues to act like a safe haven dealing with rising central bank stimulus odds. With the Japanese Yen and US Dollar leading the way, the Euro found itself outpacing the riskier commodity currencies and the British Pound, as Brexit headlines moved back to the forefront. Overall, though, there was little by way of meaningful economic data or information that has shifted the Euro's or EUR/USD expected direction – more sideways trading – over the past week.

There aren't many meaningful Euro-Zone data due out over the coming days either, so traders' collective attention shouldn't be trained on the economic calendar. Instead, EUR-crosses are likely to prove highly volatile throughout the week thanks to central bank interference: there are five ECB speakers between Monday and Friday; and the Federal Reserve and Bank of Japan both meet from September 20-21.

Among the ECB speakers due out over the coming days, President Mario Draghi's remarks on Thursday should carry the most weight. If you recall, at the September ECB policy meeting, ECB President Draghi made clear that the effectiveness of the QE program may be challenged given the constraints the capital key now poses. “We tasked the relevant committees to work on the smooth implementation and the changes that are needed to ensure the smooth implementation,” he said. In other words, the ECB is not focused on the size of the QE program right now, but rather, whether or not it's functioning properly.