News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
Gold
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Euro Slams the Brakes by a 2-Year High on Draghi Caution

Euro Slams the Brakes by a 2-Year High on Draghi Caution

Benjamin Spier, Technical Strategist

Talking Points:

  • Draghi warns that single currency gains relevant to price stability
  • EUR/USD reverses 100 pips from a 2-year high

Want to trade with proprietary strategies developed by FXCM? Find out how here.

European Central Bank President Draghi sounded caution today regarding recent Euro gains, leading to a 50 pip decline in EUR/USD. He said that Euro gains are increasingly relevant to price stability and added that the ECB will counter any material risk to inflation expectations.

Draghi also said that too-low inflation is now more relevant than too-high inflation, which was a change in language from Draghi’s comments earlier this month that inflation risks are broadly balanced. Draghi’s previous comments followed the ECB’s decision to keep the interest rate unchanged, but Draghi also warned then that ECB is ready to consider all available instruments if necessary. Therefore, any signs that the ECB is closer to reacting to lower price pressures may push the Euro lower.

EUR/USD 1-Minute: March 13, 2014

Euro_Slams_the_Breaks_by_a_2-Year_High_on_Draghi_Caution_body_Picture_1.png, Euro Slams the Brakes by a 2-Year High on Draghi Caution

That’s why the Euro declined more than 50 pips against the US Dollar on the release of Draghi’s comments. EUR/USD has fallen back 100 pips from the 2-year high set earlier today, and those looking for a continuation of bullish price action should consider waiting for a close above 1.3970, according to Senior Currency Strategist Kristian Kerr.

Chart created by Benjamin Spier using Marketscope 2.0. Add DailyFX Support/Resistance to your charts at FXCM Apps.

-- Written by Benjamin Spier, DailyFX Research. Feedback can be sent to instructor@dailyfx.com .

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES