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EUR/USD Dives Below 1.2800, Fresh 14-Months Low Amid Draghi's Speech

EUR/USD Dives Below 1.2800, Fresh 14-Months Low Amid Draghi's Speech

Edward Hyon,

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European Central Bank President Mario Draghi spoke in Vilnius, Lithuania at 07:00 GMT today. There were nothing new mentioned from his speech but he reiterated ECB’s commitment in their mandate of price stability. Moreover, he alluded to the geopolitical concerns and the lower Euro to provide stability from these risks. This is on the backdrop of the ECB President addressing to the economic and monetary affairs committee of the European parliament on Monday, where he mentioned and reiterated ECB’s readiness in using additional unconventional monetary tools if needed. In addition, he expects more demand for the TLTROs from the banks, when the funding is up for grabs again in December.

Before ECB Mario Draghi’s speech, the Euro hit a 14-month low against the US Dollar in Asian trade on Thursday. Following the speech, EUR/USD extended losses to trade firmly below 1.2800 and traded as low as 1.2732 level. The driving force was also from the broad US Dollar strength that managed to climb to a 4-year high. From a technical standpoint, DailyFX Currency Analyst David De Ferranti mentions a breach of the 1.2755 floor, which would open up towards the November 2012 low near 1.2660 and resistance at 1.2850. Meanwhile according to DailyFX Speculative Sentiment Index, the ratio of long to short positions in the EUR/USD stands at 1.68 as 63 percent of traders are long.

Daily Chart - Created Using FXCM Marketscope 2.0, Volume Indicator Available Here

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Edward Hyon, DailyFX Research Team

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