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Now that the RBA has shared its thoughts, all eyes will be on European Central Bank (ECB) Governor Mario Draghi and his gang to see if the recent improvements in growth and inflation have convinced them to shed their dovish feathers.

Here are points you need to know before you trade Thursday’s ECB statement (11:45 am GMT) and Mario Draghi’s presser (12:30 pm GMT):

What happened last time?

As expected, the ECB made no changes to its policies. Interest rates on the main refinancing operations, marginal lending facility, and the deposit facility remained at 0.00%, 0.25% and -0.40% respectively.

The ECB also shared that it expects rates to remain “at present or lower levels for an extended period of time, and well past the horizon of the net asset purchases,” while asset purchases – currently at a rate of €60B per month – will run “until the end of December 2017, or beyond, if necessary.

ECB top boss Draghi wasn’t as clear in the presser that followed. See, while he lauded that the economic recovery is now “solid and broad” and that “downside risks to recovery have diminished,” he also added that (emphasis mine):

“A very substantial degree of monetary accommodation is still needed for underlying inflation pressures to build up and support headline inflation in the medium-term. In terms of my criteria the (inflation) assessment hasn’t really changed.”

Basically, while ECB members are less worried about downside economic risks, the overall inflation outlook still hasn’t improved enough to warrant serious talks about ending their QE program.

What’s expected this time?

But that was last month. Since then the euro zone’s growth, employment, trade, and business sentiment conditions have picked up. Not only that, but Macron winning the French Presidential elections also decreased the political risks in the region.

On the other hand, headline AND core inflation numbers significantly slipped in May, which supports the ECB’s plans of waiting to see broad and stable price increases before tapering its easy policies.

So, how can the ECB find that balance between recognizing improved economic conditions while still preventing market players from assuming a tighter monetary policy in the foreseeable future?

Analysts believe that Draghi and his friends will start with one or both of these:

Forward guidance

Since October, the ECB has maintained that it expects its key rates to remain “at present or lower levels for an extended period of time, and well past the horizon of the net asset purchases.

But if a Reuters piece were to be believed, ECB members might be open to removing the “we might extend our easing program” part of their rhetoric.

Tone of economic and/or inflation projections

Some think that the ECB will start laying the groundwork for winding down their asset purchases by upgrading their economic forecasts. Aside from recognizing that economic risks are now “balanced,” the ECB might also upgrade its growth estimates.

Meanwhile, the ECB is also expected to downgrade its inflation forecasts. This wouldn’t be surprising since Draghi also argued that wages – which he considers the “linchpin” of price growth – are not rising fast enough to drive inflation.

How might EUR react?

Euro bears had a field day last month after Draghi hinted that he and his team have their eyes firmly on inflation and that they’re not planning on discussing an exit anytime soon.

The euro fell down and stayed down for the rest of the day with EUR/USD dropping from 1.0933 to a session low of 1.0851 while EUR/JPY also dipped from an intraday high of 121.90 to a low of 120.60.

EUR Pairs (1-Hour Forex Charts)
EUR Pairs (1-Hour Forex Charts)

This time around, you should take note of two important things. First, A LOT of traders have been anticipating hawkish (or at least less dovish) remarks from the ECB and the euro’s recent strength are showing that. It’s highly likely that the actual announcement could inspire a buy-the-rumor, sell-the-news situation.

Next, remember that the ECB won’t be the only headline-maker during the day. Aside from the much-awaited general elections in the U.K., former FBI Director James Comey is also set to appear in front of the Senate intelligence committee to talk Trump. Watch out for extra volatility on Thursday!

ECB’s likely bias

If we take a quick look at the euro zone economy, we can see how it has come a long way from needing easy monetary policies to combat deflationary risks. Many believe that the ECB can now lighten up a bit.

But, as Wonder Woman said, “It’s not about (what you) deserve. It’s about what you believe.” And it looks like ECB members still believe that a more stable price growth is needed before they ease the pedal from the metal. In fact, Draghi shared as late as last week that their loose policies “will stay in place until we see a convergence in the rate of inflation.

And with ECB members already reducing their monthly asset purchases in April; the region’s bond yields rising, and the euro gaining ground, they can afford to wait before signalling tighter policy conditions.