ECB: A little Bit More Bearish Than Expected

FX_IDC:USDEUR   U.S. Dollar / Euro
It has been all about ECB these days. The markets were ready to catch any signal from the regulator about the tapering. Actually, the really important thing is not today’s meeting results, but the timing of the next ECB’s rate hike. We don’t expect this until the springtime of 2019.
The appreciation of the euro is the last thing that ECB wants, so Draghi should be very careful during his speech. In the morning, EUR/USD traded in the range beyond the 1.1800 level. The pair touched intraday highs at 1.1833. This was probably the last time we saw EUR at these higher levels, at least short term.
The European regulator did not deliver any surprise and decided to keep the status-quo on rates as expected. But the extension of QE was a little bit more bearish - to September 2018 and "maybe beyond". This was disappointing news for the euro bulls.
The euro went into free fall, and EUR/USD approached the strong support line at 0.1750. This is the area of swing lows, and the bears need more arguments to push the pair through it. Draghi will deliver some details and we may soon see the euro at 1.1740.


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