Euro breaches $1.24
The single currency dropped to a two-year low after Mario Draghi reiterated his commitment to using unconventional tools to turn the tepid eurozone economy around. Dealers viewed this as Mr Draghi leaving the door open to full blown QE, and this sent the euro crashing through $1.24.
This morning it was reported that German industrial production in September increased, but it failed to meet the market consensus (1.4% vs 2.1% expected). This highlights that the strongest economy in the currency union isn’t as strong as traders have hoped.
The drop below the psychologically important $1.24 mark keeps the pressure on the euro. As Brenda Kelly stated, $1.2290 has been a major support level, and if that is breeched $1.22 will be in the crosshairs.
To the upside, the 50-hour MA of $1.2455 is the immediate target, and the next level up is the November high $1.2577. Beyond that, traders will look to $1.26.