Draghi discontent: EUR/USD leaps on internal opposition to trillion

Reuters reports that central bankers are out to challenge ECB President Mario Draghi on his leadership style. Draghi has been pushing monetary stimulus, and if he is cornered, the stimulus could stop and the euro could stop weakening. The sources quoted in the article point to Draghi’s mention of enlarging the balance sheet by around a trillion euros as  something that wasn’t agreed upon. They also point to Trichet’s more open style, but it seems that those Germans prefer Trichet’s German style in handling inflation more than they oppose Draghi’s style.

If Draghi cannot send a message about a bigger balance sheet in face of deflation danger, the only way is up for EIUR/USD. The pair  is up to 1.2550.  Update: EUR/USD is tackling resistance at 1.2570.

The article states  mentions the reported tensions between the German Bundesbank president Jens Weidmann and Draghi but doesn’t  say that the sources are German.

Analysis:  Did Bundesbankers only vent frustration, unable to stop the inevitable? Sell opportunity in EUR/USD?

Here is a quote  from the article penned by Eva Taylor and Paul Taylor:

Irritation among national governors who hold a majority on the 24-member council could limit Draghi’s space for bolder policy action in the coming months as the bank faces crucial choices about whether to buy sovereign bonds to combat falling inflation and economic stagnation.

Some members intend to raise their concerns with Draghi at the governors’ traditional informal working dinner on Wednesday before their formal monthly rate-setting meeting on Thursday, the sources interviewed by Reuters said.

And another interesting thing:

Here is the chart showing the leap. The next resistance line is 1.2570, and it’s followed by 1.2620 and 1.2660.