The week after Draghi – where does the Euro stand? - Forex News by FX Leaders

The week after Draghi – where does the Euro stand?

Posted Monday, October 26, 2015 by
Skerdian Meta • 1 min read


EUR not shining brightly
The Euro isn´t shining brightly at the moment

Last Thursday, the ECB president Mario Draghi delivered another dovish speech, which sent the Euro down more than 3 cents against most of the majors in the following 4-5 trading sessions. He announced a further rate cut and possibly a negative rate for the Euro deposits since inflation is still soft. The other dovish comment was in relation to the stimulus program that the ECB has applied from March. He said that the actual programme is not having the impact on the European economy that the ECB had expected when they began, so it is very likely that they will increase the size of the programme. Right now they are buying $50-$60 billion worth of assets a month, but come December that amount will go up to $80-$90 billion.

The Euro has started a steep downtrend and it hasn’t looked back since it initiated. It is now approx. 330 pips against the US Dollar and the other majors. The move down on EUR/USD was so ferocious that we only managed to get in once and open a sell forex signal on Friday, which resulted in profit. The pair stalled at 1.10 and slowly crawled back up to 1.55, where we had another pending sell forex signal. This signal was triggered during the night and hit the take profit target this morning. To me, that was more of a dead cat bounce as the retrace was very minimal compared to the size of the downward move. Wednesday's FED FOMC meeting might unnerve the EUR/USD bears and spur some profit-taking by sellers – but eventually the downtrend will resume again. So, our forex strategy is to sell this pair and maybe open sell forex signals on the 1.1050, 1.1070, and 1.11 levels.

Check out our free forex signals
Follow the top economic events on FX Leaders economic calendar
Trade better, discover more Forex Trading Strategies

About the author

Skerdian Meta // Lead Analyst
Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.
Related Articles
The ECB is getting ready for more stimulus, but we will see how big the second PEPP programme will be
1 day ago
GBP/USD is 60 pips higher now, as BOE's Bailey confirms more QE coming up
1 week ago
Comments

Leave a Reply

avatar
  Subscribe  
Notify of