EUR/USD found a reason for a rebound
26.05.2014
This Monday afternoon the main currency pair found support for a technical recovery – the comments of the ECB head Mario Draghi were interesting.
The euro/dollar remained under pressure in the early Asian session today, and it seemed that nothing interesting would happen this Monday. But the head of the European Central Bank Mario Draghi radically changed that situation, giving the EUR/USD a reason for a rebound.
Speaking at a forum in Sintra, Draghi said that the low consumer inflation price is due to the high euro exchange rate and the central bank is not happy with the weak HICP, so steps are being taken and will continue to be taken. In that case, if the inflation rate can not be rehabilitated under a depreciating euro, the ECB is ready to expand their asset purchase scheme.
The ECB has for far too long silently watched the speculative rally in the euro/dollar, and now that this growth proved to be disastrous for the euro zone and its inflation rate, it was time to take action.
Today's rebound in the EUR/USD is a signal that the market has correctly understood Draghi. While deflationary risks will remain in the euro-zone economy, the euro will not be able to recover to previous peaks that were seen in spring.
Today, the U.S. market is closed as the country celebrates Memorial Day, and activity in the currencies in the second half of the day will be below average.
RoboForex Analytical Department
The euro/dollar remained under pressure in the early Asian session today, and it seemed that nothing interesting would happen this Monday. But the head of the European Central Bank Mario Draghi radically changed that situation, giving the EUR/USD a reason for a rebound.
Speaking at a forum in Sintra, Draghi said that the low consumer inflation price is due to the high euro exchange rate and the central bank is not happy with the weak HICP, so steps are being taken and will continue to be taken. In that case, if the inflation rate can not be rehabilitated under a depreciating euro, the ECB is ready to expand their asset purchase scheme.
The ECB has for far too long silently watched the speculative rally in the euro/dollar, and now that this growth proved to be disastrous for the euro zone and its inflation rate, it was time to take action.
Today's rebound in the EUR/USD is a signal that the market has correctly understood Draghi. While deflationary risks will remain in the euro-zone economy, the euro will not be able to recover to previous peaks that were seen in spring.
Today, the U.S. market is closed as the country celebrates Memorial Day, and activity in the currencies in the second half of the day will be below average.
RoboForex Analytical Department
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