Draghi: QE to Sept 2016 or beyond. Sees downside risk to growth/inflation
The EURUSD made a curious break to the downside BEFORE the official release of the headline comments from Mr Draghi...HMMMM. His comments are more on the dovish side - warning about more QE, lower potential inflation, lower potential growth. Initial claims showed continued strength in jobs at 259k vs 265k est.
The EURUSD has tumbled to a low of 1.1225 and we are currently seeing a correction toward the 38.2-50% of the days trading range (see chart above). Will the sellers lean against the midpoint? So far they are holding the line...
If the downside momentum continues, the 100 day MA and trend line support comes in at the 1.1176 area. This is the next key support target for the pair. The 200 day MA and underside of a downward sloping trend line comes in at the 1.1125 area.
The range for the week has extended to 167 pips and gets the pair outside what would have been the lowest trading range since August 2014.
