EUR/USD 330 pips from the lows
The euro continues to press higher. The ECB unveiled a heavy round of easing but when Draghi hinted there would be no more rate cuts.
Or did he say that?
What he actually said was that there would be no more cuts based on current forecasts. He also said the ECB would turn to other measures.
Ultimately, he delivered but the communication was bungled and it set off an epic rush to the exits. The BOJ turnaround was fresh in the market's mind and it happened again here.
If I look at only the fundamentals, I think there is a great case for selling the euro here. The Treasury bond auction was soft yesterday and US yields are far more attractive than anything in Europe. The economy is better in the United States as well, as underscored by today's initial jobless claims report.
But you can't ignore the chart. A squeeze will end when it ends. If the path for the euro is lower, now isn't the time to pile in. Wait until the dust settles.
