EUR/USD down hard ahead of Draghi
Technical analysts at Citigroup are out with a quick recommendation after the ECB decision. They are selling at spot (1.0867) with a stop loss at 1.1080 and a target at 1.04-1.05.
The last central bank to play the 'shock-and-awe' card was the Bank of Japan as they introduced negative rates. USD/JPY rallied nearly 300 pips but peaked about 9 hours later. Four days afterwards the gains had evaporated and the pair went on to decline 1000 pips from the highs.
Technically, the euro bears are eyeing the 1.0825 March low. A break below would add some momentum to the trade.
For me, the problem with the BOJ was that negative rates had some caveats and it was interpreted as a sign of deep problems in the global economy. In turn, that sparked a bid in risk assets.
For Europe, the market knows the economy is struggling.
