Euro Pops, USD Drops on Draghi. We Pocket the Results
Skerdian Meta • 2 min read
An hour ago we gave an update on the US brief, mentioning that the ECB has no option but to acknowledge the improvement in the economy of the Eurozone. Mario Draghi is currently still holding the press conference, and he stated that the EU economy “has accelerated more than expected”.
That was all the market needed for the Euro to immediately pop higher. In fact, all major currencies popped higher, with the exception of the USD. This became a broad USD selloff once again.
EUR/USD broke above 1.25 for the first time in more than three years
EUR/CHF shot higher to 1.1730s from 1.1670, so we got our pips from the buy signal we had opened beforehand. USD/CAD dove once again, reaching our take profit target (TP) from our sell signal. AUD/USD reached our TP as well, however, we had closed the Forex signal manually. Thank you Mario for a clear board, you’re super.
The USD is now fighting back again. The Buck is up against all majors except for the Euro. EUR/USD remains approximately 70 pips up from where it was before Draghi.
The reverse came after comments aimed at the US. He said “explicit targeting of exchange rates is not what has been agreed upon” and “the ECB has concerns about a possible change in the US policy”.We know they are aimed at Trump and Mnuchin.
The market now thinks that the other major players won’t let Trump and Mnuchin to do as they please, which is sending the USD down the sinkhole. The USD buyers gained some of their confidence back, which explains the reverse happening at the moment.
Draghi also stated that “based on today’s economic data from the EU, there’s little chance at all that the ECB will hike interest rates this year”. Yet another dovish comment for the Euro.
We are now looking at EUR/GBP for a sell forex signal. This pair popped higher following Draghi’s comments, however, the 50 SMA is providing resistance on top. Here we go, trying to catch another trade.