FXStreet (Córdoba) – EUR/USD continued to decline during the American session and printed a fresh daily low at 1.1117, the weakest level since September 25. The pair holds near the lows as US dollar remains resilient and the euro under pressure across the board.
Today’s statement from Mario Draghi opened the doors to more easing from the European Central Bank (as soon as December 3) and triggered a decline of the common currency in the market. The euro is having the worst day in months.
EUR/USD: Back to the monetary policy divergence trade?
Before Draghi’s press conference EUR/USD was trading above 1.1300 and then started to fall sharply as the ECB president mentioned that in December the Governing Council would re-examine the purchase program and also that during today’s meeting a rate cut was discussed.
Many analysts refocus on the divergence between the Federal Reserve and the ECB current policies and its impact on the EUR/USD. “Draghi has cemented the EUR’s status as a funding currency of choice. With the USD’s overall fundamentals more ambiguous amid a softer economy and Fed dithering, EUR/USD downside has become more of a one-sided trade”, said analysts from TD Securities, joining the group of experts that now expect a decline in EUR/USD. Price has approached September lows that lie at 1.1080/85.
“We expect further downside here, but we will need to see spot trade conclusively lower through critical support at 1.1105 and 1.0809 before we think the bearish trend is back in full swing”, explained TDS analysts.
(Market News Provided by FXstreet)