EUR/USD: Draghi shot back with promises
By Kira Iukhtenko
On the ECB November 6 meeting Mario Draghi has once again used his beloved tool of monetary stimulus: promises. Monetary policy remained unchanged, but Draghi underlined the ECB will be unanimous in launching new stimulus if needed. The overall economic prospects remain gloomy, so markets will now be expecting a large-scale QE to come in December. Dovish ECB tone pulled EUR/USD down below 1.2400.
Euro zone is scheduled to release a block of important data next Friday: don’t miss October CPI and flash 3 quarter GDP data.
Technical picture: EUR is now clearly oversold with the short positions at their 2012 levels, so we concede a bullish correction towards the 1.2700 mark. Our main trade idea is selling the pair on rallies with a medium-term target at 1.2250. This is where the 200-month MA and the trend line support lies.