Dovish Draghi quells taper tantrum
|The EURUSD came under renewed selling pressure on Thursday, with prices descending towards 1.0852 after Mario Draghi swiftly quelled taper tantrum speculations with dovish inflation talks. Although the ECB’s overall tone concerning the Eurozone’s economic recovery was slightly more optimistic, the monetary stance remained firmly dovish.
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With the Eurozone economic recovery becoming increasingly solid some downside risks have diminished, however risks predominantly due to global factors and political uncertainty may encourage the Central Bank to remain on standby. With QE running until the ECB sees a sustained inflation pick-up, Euro bears could exploit this opportunity to attack the EURUSD lower. From a technical standpoint, a daily breakdown below 1.0850 on the EURUSD may encourage sellers to target 1.0800 and 1.0750, respectively.
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