Draghi announced Public Sector Purchasing Program worth of EUR 60 bn per month. This program is going to start from Monday, March 09, 2015. Draghi made a comment that purchases are limited to bonds equivalent to the ECB's deposit rate 0.2%. The euro fell below 1.10 for the first time since 2013 hitting a twelve-year low against the USD. All technical indicators favor bears. The recent strong US economic data raises hints that the US Fed could raise the interest rate in June. The divergence in both central banks' policies drags the pair to much lower levels.
Today and tomorrow Euro group meeting due. During todays meeting Greek finance minister expected to submit his economic reforms. Draghi put Greek aside from the ECBs easing policy.
Ahead of the Eurogroup meeting, the euro is trading higher against the USD at the Asian session. As we recommended in Fridays article, the pair looks extremely bearish for another 200 pips initially. That's what happened on Friday's session. The pair closed at the lowest point of the day. Eventually, it can go below 1.0000. The pair has the nearest support at 1.0760 which is a low of September 2013. The broken support base turned into the resistance zone between 1.1260 and 1.1280. The prices are closed and trading far below hourly moving averages. Until prices close below 1.1100, use every rise to sell this week as well. The weekly resistance is found between 1.1100 and 1.1260. Forgot buying, until the price closes below 1.1260 on a positional basis. The near-term target seems at 1.0760. The longer-term target seems at 0.9000 in case prices close below 1.0760 on a monthly basis.
Downtrend remains strong
Resistance: 1.0900, 1.0960, 1.1100.
Support: 1.0820, 1.0760.
Trade: use a rise to sell.
Uitgevoerd door, Analytische expert
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