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Draghi comments support the euro

Apart from against the euro and sterling, the greenback managed to regain some ground against most of the G10 currencies.

EUR
Source: Bloomberg

With ECB President Mario Draghi speaking, there was always a strong chance we’d see some volatility. True to form, he delivered.

The main focus this time was on the bond markets and Draghi moved to calm things down, saying that what matters is to see an equivalent effect on investment, consumption and inflation even if data improves.

These comments appeased investors who were growing wary that the ECB may pull the QE pin early. With order somewhat restored, the euro crept higher and EUR/USD printed a high of $1.1450.

However, the price action seems to have stalled in that region and the pair is undergoing some consolidation. As we approach $1.1500 I feel traders will be tempted to take speculative shorts given there is a downtrend resistance that kicks in in that region.

EUR/USD
Click to enlarge

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