It was the last monetary policy decision for Mario Draghi on Thursday and boy, he delivered! 

Traders were shocked by the overall dovishness of this decision and the EURUSD pair dropped circa 100 pips to trade near 1.0950, while EU stocks advanced higher. 

First of all, the ECB cut the deposit rate by 10 basis points to -0.5%, which had been expected by analysts, while the central bank also introduced the so-called tiering, for reserve remuneration in which part of banks’ holdings of excess liquidity will be exempt from the negative deposit facility rate, in an attempt to mitigate the adverse impact to banks.

Additionally, the ECB dropped calendar-based forward guidance and replaced it with inflation-linked guidance, noting that key ECB interest rates will "remain at their present or lower levels until it has seen the inflation outlook robustly converge to a level sufficiently close to, but below, 2% within its projection horizon."

Finally, the ECB restarted the Quantitative Easing program, with a monthly amount of 20 billion EUR, but this program will be open ended, thus it could run for many years.

As previously said, the euro reacted to the downside but managed to recover quickly.

Technically speaking, the resistance could now be seen near 1.1060 and if broken to the upside, the euro accelerate higher toward the 1.11 threshold. On the other hand, the support remains at today§s lows of 1.0940 and afterward near the 1.09 handle.

Trading FX/CFDs on margin bears a high level of risk, and may not be suitable for all investors. Before deciding to trade FX/CFDs you should carefully consider your investment objectives, level of experience, and risk appetite. You can sustain significant loss.

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