EURUSD Price Remains Under Pressure, ECB's Draghi Reiterates Downside Risks
EURUSD Price, Chart and ECB's Draghi:
- ECB President Draghi remains primed for future risks.
- EURSUD lower highs prominent in recent sessions.
The latest ‘Monetary Policy in the Euro Area’ speech by ECB President Mario Draghi in Frankfurt earlier today continues to warn of below target inflation and uncertainty in the global economy. President Draghi highlighted that weakness in world trade has continued, significantly affecting the manufacturing sector, with industrial production in the area falling by 4.2% on the year to December, its largest decline since 2013. Draghi ended his speech by reinforcing his commitment to boost price pressures, saying that the ECB will adopt all the monetary policy actions ‘that are necessary to achieve its objective’, adding that the central bank is ‘not short of instruments to deliver on our mandate’.
This recognition of the current low growth/inflation outlook in the Euro Area will push back any monetary policy tightening further back into 2020 and, in extremis, leaves renewed monetary policy loosening on the table.
EURUSD continues to drift lower and is within one cent of the 22-month low made on March 7 this year. The chart shows six lower highs in a row, discounting Sunday’s candle, while the pair remain firmly under all three moving averages. The 200-day moving average has acted as strong resistance three times in 2019. The downtrend from the start of the year is intact with the only supportive technical signal coming from the CCI indicator which is nearing the oversold (-100) zone.
EURUSD Daily Price Chart (October 2018 – March 27, 2019)
Retail traders are 57.3% net-long EURUSD according to the latest IG Client Sentiment Data, a bearish contrarian indicator. Recent changes in daily and weekly sentiment – net-short positions are 32.9% higher than last week - however give us a stronger bearishtrading bias for EURUSD.
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