EURUSD Plunges Lower As The Dollar Strengthens Further

Market Analysis /
05 Feb 2018

The Euro took a hit and the dollar continued to strengthen after Mario Draghi hinted that he was not ready to slow down the amount of stimulus being pumped into the economy just yet in a speech earlier today. The news saw EURUSD collapse to lows below 1.2400 before rebounding slightly, but the US dollar has seen strength across the board as stocks continued to slide lower.

It’s yet again inflation that is the battle ground for some of these major currency pairs as was reiterated to the European parliament today. In his speech, he called for patience and persistence when it came to the central banks APP and said that the continued growth that the stimulus package is encouraging in the Eurozone would soon see inflation tick towards the banks 2% inflation target.

The current rate of asset purchasing is set at 30 billion euros per month, with growing pressure on the ECB to begin reducing the amount, in a similar move to that carried out by the Fed. However, with Draghi seemingly unmoved by the mounting pressure we could well see the plan run past the current deadline.

From a technical standpoint we have seen the lows come in at close to the downside level at 1.2382, which has been under pinning the market and has seen some downside lows. We’ve also seen a key break below the 61.8% retracement of the recent up move. The clear key level on the downside is now the 1.2335 level which is January lows.

The information provided here has been produced by third parties and does not reflect the opinion of AxiTrader. AxiTrader has reproduced the information without alteration or verification and does not represent that this material is accurate, current, or complete and it should not be relied upon as such. The Information is not to be construed as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product, or instrument; or to participate in any particular trading strategy. Readers should seek their own advice. Reproduction or redistribution of this information is not permitted.

 

More on this topic

See More News

Open your account. Apply in minutes.

Start your trading journey with a trusted, regulated, multi-award winning broker.

Open Account Try a Free Demo