"The Central Bank delivered much more than what the market expected, putting out all the heavy armor to boost local growth and inflation. The ECB shocked markets by cutting rates across the board, sending the main benchmark down to 0.0% from previous 0.5%, and the deposit rate to -0.4%, down as expected by 10bp. Also, QE was expanded to â‚¬80bn per month starting in April, with the eligible collateral was expanded to include investment grade euro-denominated non-bank corporate bonds, and new four-year TLTROs were added. The pair plummeted down to 1.0821, but within the Q&A following the press conference, Draghi added that the Government Council sees no need for further rates cuts from here.
The comment saw the pair reversing its rally, but also stocks plummeting to fresh monthly lows in Europe, and the EUR/USD topping out at 1.1217 in the American afternoon. Although the initial tough could be that the market overreacted, the fact is that Mario has fired all of its bullets, pretty much promising ad eternum QE, and no more rate cuts. And speculators have run to price it in, particularly considering recent dollar's weakness. The EUR/USD pair retreated partially from its highs, but holds near the 1.1200 region, as seems poised to continue advancing, now as long as buying interest surges in pullbacks towards the 1.1120 level. Intraday technical readings are in extreme overbought territory, but more relevant, the pair has breached the 61.8% retracement of its latest daily slide around 1.1160, the immediate support, while trading above its 100 and 200 DMAs. 1.1245 is the level to watch as a break above it can see the pair rallying up to 1.1460 a major long term resistance during the upcoming days."
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.