EUR/USD < 1.18 - break confirmed

Another round level lost: the pair was under pressure and slipped below the round number. Will this break be confirmed?

The low so far is 1.1790. The pair was launched in 1999 with a level of 1.17.

Speculation about QE has moved from the question of “if” to “how much” with estimations  concentrating around 500 billion euros – a substantial program. However, it is unclear if the ECB knows exactly what it plans to do.

Yesterday, the initial figures for inflation in December showed that the euro-zone officially slipped into deflation: with a drop of 0.2% in prices. However, core  inflation ticked up to 0.8% y/y.

In the US, the FOMC meeting minutes confirmed the stance of the Fed towards raising the rates during 2015, but not before April. June seems to be the preferred timing.

Update: EUR/USD ticks back up above 1.18. The struggle continues.

Update 2: the break is now confirmed with a further move to 1.1770.

In addition to the regular monetary  policy divergence, the terror attack in Paris is still grabbing the headlines and is also weighing on the common currency. A policewoman has died in a shooting in the southwest of Paris. This follows the deadly attack on the headquarters of the Charlie Hebdo yesterday, which left 12 dead.

More data: euro-zone PPI dropped below expectations while euro-zone retail sales rose more than predicted.

More:  EUR/USD: A QE program worth over €500 billion could trigger big sell off – BTMU