EUR/USD fades a knee-jerk bullish spike, plunges below 1.10 mark post-ECB
- ECB cuts interest rates by 10 bps and announces a new QE program.
- The EUR weakens across the board in reaction to dovish ECB decision.
- Investors now look forward to Draghi's post-meeting press conference.
The EUR/USD pair faded the post-ECB bullish spike to and quickly retreated around 100-pips in the last hour, refreshing session lows and sliding farther below the key 1.10 psychological mark.
The shared currency picked up some upside momentum and fizzled out rather quickly after the European Central Bank, as was widely expected, lowered interest rates further into the negative territory by 10 bps to -0.50% at the conclusion of its September policy meeting.
The move was largely priced in the market and hence, prompted some intraday short-covering move. The ECB reintroduced QE program, €20 billion per month from 1 November, and reiterated to buy bonds as long as needed. The announcement was perceived as a more dovish tilt and eventually exerted some fresh downward pressure on the pair.
It will now be interesting to see if the pair is able to attract any buying interest at lower levels or the latest leg of a sudden drop marks the resumption of the prior depreciating move as the focus now shifts to the post-meeting press conference, where comments by the ECB President Mario Draghi should infuse a fresh bout of volatility around the EUR crosses.
Technical levels to watch
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
