Draghi still sees inflation as subdued – EUR/USD slides

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EUR/UDS was already touching 1.12 and then it dropped to 1.1287 on Draghi’s words.

Draghi said that the macroeconomic environment is improving but balanced it with more stable words: there is no reason to deviate from the current policy. The indicators are not there. Not yet at least.

At the moment, the ECB does not see any evidence of any widespread development of bubbles led by credit.

Most importantly, Draghi said that inflation expectations remain subdued. This comes after core inflation reached the highest level since 2013.

So, if Draghi shrugs off rising inflation, the scope for tapering is low. And on this basis, the euro loses ground. Here is the 15-minute chart. The text of his speech was published at 12:45 GMT:

More: EUR: Specs Started Buying Into Stronger EUR Outlook; What’s Next? – BTMU

The President of the European Central Bank is speaking in Madrid. Spain has seen the worst of the crisis, with unemployment soaring to 27% at the peak. The current rate of around 18% is not too good either.

EUR/USD has been bouncing off support at 1.1170. The pair reached these levels after the dollar enjoyed a comeback. The cycle high for euro/dollar was 1.1266. This is just below the swing high of 1.13 seen around the US elections in November.

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Yohay Elam – Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I’ve accumulated. After taking a short course about forex. Like many forex traders, I’ve earned the significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I’ve worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.

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