So much has been said about ECB’s January meeting and the possibility of the announcement of some sort of facilities, is hard to believe the day has finally came, and Draghi will unveil its latest decision in a couple hours. Until last Thursday, investors were not fully convinced the ECB was going to launch quantitative easing today. It was a possibility, but not a big one, as Draghi is more of a talker than a doer. But then appeared the SNB, scared enough of upcoming European Central Bank move to lift the peg between EUR and CHF and to pay an immense financial cost of such move. Market talks then, turned into “massive ECB QE” expected for today, something in the range of 750 billion to 1 trillion Euro in bond purchases.
To add to the confusion, there was some kind of leak yesterday pre announcing 1,1 trillion EUR QE to take place between March 2015 and December 2016, making the EUR/USD pair swing between a 120 pips range in a matter of minutes. The same kind of volatility can be expected for today, with the market probably reacting first to the announcement itself, and later to Draghi’s words.
From a technical perspective, the pair maintains the overall ruling bearish trend, but that does not mean it can’t post a strong upward rally following the news. The key resistance level, will be 1.1680, yesterday’s high, where sellers are expected to cap the upside. If stops above it get triggered, the rally may extend up to 1.1730/50 the next line in the sand.
To the downside, the key support to follow is 1.1540, with a break below it exposing the pair to a sharp decline down to 1.1458 this month low. If this last gives up, the next strong long term support stands at 1.1370 with the pair probably testing it during the upcoming sessions.
View Live Chart for EUR/USD
To add to the confusion, there was some kind of leak yesterday pre announcing 1,1 trillion EUR QE to take place between March 2015 and December 2016, making the EUR/USD pair swing between a 120 pips range in a matter of minutes. The same kind of volatility can be expected for today, with the market probably reacting first to the announcement itself, and later to Draghi’s words.
From a technical perspective, the pair maintains the overall ruling bearish trend, but that does not mean it can’t post a strong upward rally following the news. The key resistance level, will be 1.1680, yesterday’s high, where sellers are expected to cap the upside. If stops above it get triggered, the rally may extend up to 1.1730/50 the next line in the sand.
To the downside, the key support to follow is 1.1540, with a break below it exposing the pair to a sharp decline down to 1.1458 this month low. If this last gives up, the next strong long term support stands at 1.1370 with the pair probably testing it during the upcoming sessions.
View Live Chart for EUR/USD
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