EUR/USD plummets on dovish ECB twist, Draghi's presser up next

Haresh Menghani FXStreet

• ECB confirms the end of its massive bond purchase program.
• Dovish interest rate outlook prompts some aggressive selling.

The EUR/USD pair extended its post-ECB sharp retracement slide from near one-month tops and tumbled to fresh weekly lows in the past hour.

The pair did spike to an intraday high level of 1.1852 in the knee-jerk reaction to the ECB's signal to end its massive bond purchase program. The disappointing, however, came from the accompanying rate statement that said that the Governing Council expects the key interest rates to remain at their present levels at least through the summer of 2019.

A dovish twist prompted some aggressive selling and weakened the shared currency across the board, with the pair plummeting over 130-pips to its lowest level in over one-week. Investors now look forward to the post-meeting presser, where comments from the ECB President Mario Draghi would trigger a fresh bout of volatility across the EUR crosses.

Technical levels to watch

Immediate support is pegged near the 1.1700 handle, below which the pair could extend the downfall towards 1.1655 horizontal support. On the flip side, the 1.1770 level now becomes immediate resistance, which if cleared might assist the pair to make a fresh attempt to move back above the 1.1800 round figure mark.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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