The Draghi drag sent EUR/USD below uptrend support with the pair extending its fall below the round level of 1.11 and all the way to 1.1070. However, a consequent recovery resulted in a big bounce of nearly 70 pips and reminded us of the post Draghi recovery we have seen in September. Not so fast:
Yet the failure of the pair to recapture this line hints that this time may be different: that the huge dovish effort made by the ECB may pay off in a larger scale and for a longer time, at least until the expected delivery time: December 3rd.
Draghi used his best verbal skills. This included opening the door for more intense money printing, a longer period of money printing and even a deeper negative deposit rate. He also expressed serious concern about inflation and the exchange rate and also topped it off by using the word “vigilant†which implies imminent action.
More: EUR: How Low Could Draghi Go? 4 Takes – Deutsche Bank
