FXStreet (Guatemala) – EUR/USD is making new session lows on Draghi’s comments. After yesterday’s bad behaviour from him, one might expect some jawboning with the euro rallying yesterday the furthest it has done in six years.
“More stimulus can be deployed if need be…while 680b EUR is added in liquidity” was the catalyst and the euro was 40 pips lower to session lows of 1.0836 before a recovery back into the 1.0870’s at time of writing.
Yesterday, the ECB only cut the deposit rate to -0.30% and by just 10 basis points, the lower end of the scale of expectations. The general region of a €10-20bn increase in QE was expected and the euro was at 1.07 leading into the presser and announcements. The big shock, however, came when Draghi did not add extra QE and only moved the end date of the current programme. The ECB chose to extend its monthly asset purchases by seven months up to March 2017 or “beyond if necessary.
EUR/USD levels
Technically, EUR/USD smashed through the doors of 1.0830/36 resistances yesterday for a run onto the 1.09 handle. The pair has found some resistance here at the midpoint of the handle, but there is the potential still for a further advance to the 1.1036 200 day ma while beyond there is the 1.1087/97, September low and 28th October high. However, on a pull-back the key target is the 100 and 200 SMA on the hourlys that are deep at 1.0687 and 1.0650.
“More stimulus can be deployed if need be…while 680b EUR is added in liquidity” was the catalyst and the euro was 40 pips lower to session lows of 1.0836 before a recovery back into the 1.0870’s at time of writing.
(Market News Provided by FXstreet)