Today the biggest currency to trade was definitely the EUR, after the announcement of ECB’s president Mario Draghi that the Governing Council raised the share of bonds the ECB can buy to 33 percent of each issue from 25 percent, and that policy makers are ready to make more adjustments to ensure the full implementation of the 1.1 trillion-euro ($1.2 trillion) program. A weaker global outlook prompted an across-the-board reduction of the institution’s growth and consumer-price forecasts through 2017 (source: Bloomberg).
An impressive EURUSD chart is forming on the last few days, and today’s price movement contributed to that. In fact, today the EURUSD ended up falling 0,8%.
EURUSD, Daily chart
EURUSD, 5 minute chart
As you can see more clearly on the 5 minute chart, the movement on EURUSD after Draghi’s statement was pretty aggressive. It ended up going exactly till the 50% Fibonacci level, but if you left before it was also ok, on my view. After the first big impulsion, the 38.2% level (5 minute chart) served well, once again, to protect the trade.
I didn’t trade this one, but just to give another example on another EUR pair, the EURGBP was even more pronounced, as you can see on the following 5 minute chart:
EURGBP, 5 minute chart
The DAX index also behaved on a pretty straightforward upward trend line during the day, reinforcing the move at the time of the important ECB announcement, going also exactly till the 50% Fibonacci level, as you can see on the following charts.
DAX, Daily chart
DAX, 5 minute chart