The graphic below, direct from the ECB, tells a fairly bleak story. Rate hikes? Don’t hold your breath.
The EURUSD was virtually unmoved on Draghi’s press conference. In other words, nothing he said surprised or even resonated with investors.
It’s been a while since we devoted a post to the lowly euro, which has gone nowhere since reaching our 1.1281 target last month — for the second time. But, that’s okay. Prior to that, it was all over the map. We targeted 1.1281 in June [see: June 14 Update on EURUSD] as the pair’s rising white channel appeared to be breaking down.
The best targets are a backtest of the falling white channel top at 1.1281 or the red .618 at 1.1186.
It came within .002 of our initial target on Aug 15, then bounced up within .0001 of our upside/backtest target of 1.1734 on Aug 28. We spent over a month wondering whether it might stretch for its SMA200 when it finally broke down on Sep 27 and plunged to within .0014 of our secondary downside target.
While it’s been an interesting trading vehicle, it’s hard to shake the impression that larger directional moves lie ahead.
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