IT was only a few hours ago when EUR/USD fell below 1.13 and yet another big figure is broken. The low so far is 1.1165 in a very rapid movement below that round number. Since yesterday, the pair is down over 500 pips, and it’s the most major pair in the world. We explained 5 reasons why the program is big and why EURUSD has more room to fall. But within less than 24 hours?
Contrary to the move by the SNB, this fall in EUR/USD is quite gradual: there were lots of opportunities to jump on the band wagon. Is it still possible to jump on this trade and short the euro?
If we look at it the other way around: USD/EUR is getting close to 0.90.
There is some support at 1.1110, which is just around 0.90 on dollar/euro and more importantly, it served as support in July 2003 and as resistance in March 2003. Yes, 2003, over 11 years ago, not 2013.
Here is the monthly chart. There’s more below:
The impact of Draghi’s massive QE program continues to hit. The European Central Bank announced a program that could surpass one trillion euros over the course of a year and a half.
The announcement of the ECB also triggered dollar strength across the board. But while the euro is not weakening on its own against the dollar, it is the biggest loser, undoubtedly.
The euro is also losing ground against its European peers: EUR/CHF is under 0.98 and EUR/GBP is reaching towards 0.7450.
Here is the boldest forecast so far: EUR/USD En-Route To 0.96 in 2015 after ECB Delivers – TD
The euro is not waiting for the next big central bank to act: the Federal Reserve meets on January 27th and January 28th. What will they announce on Wednesday?
Some think the Fed could even accelerate the move down in EUR/USD.
And here is the chart:
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