The combination of a bland and unchanging ECB statement and press conference and the big miss in weekly jobs claims EURUSD retakes 1.2000 and holds north of this key psychological zone. ECB likely to take bulk of policy decisions in October unless there are unforeseen events until then, according to Draghi. So we will likely get a broad framework for policy parameters at the next meeting, with technical details likely to be left do December. Draghi played down scarcity concerns saying that that ECB has shown that it can deal with that and exploit the flexibility of QE.
EURUSD has rallied to fresh eight-session highs of 1.2059 as Draghi’s press conference got under way. Buyers stepped in despite the ECB’s downgraded inflation forecasts, no signs of tapering anytime soon, and voiced concerns over euro strength and volatility. An odd move overall, though the FX market has been long known for sticking it to central bankers. The August 29 high of 1.2070 is the next resistance level, a break of which would take the pairing to 33-month highs.
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