EUR/USD plummets below 1.0600 on Draghi

The selling pressure around the single currency is now gathering extra pace, dragging EUR/USD to fresh lows in sub-1.0600 levels.

EUR/USD weaker on dovish Draghi

The pair met increasing downside pressure following the press conference by President Mario Draghi, where he delivered an unexpected dovish tone.

Draghi sounded very dovish when talked about inflation, saying the recent pick up in consumer prices was largely energy-driven, while the underlying up trend remains unconvincing. He, however, stressed that the outlook for the next 2-3 quarters looks higher.

Same as at the December meeting, the Council did not discussed neither tapering the QE programme nor modifying its purchase amounts.

Adding to the pair’s sharp decline, results in the US docket have come in on the strong side, with Initial Claims, Housing Starts and the Philly Fed manufacturing index all surpassing initial estimates.

EUR/USD levels to watch

The pair is now losing 0.34% at 1.0594 facing the immediate support at 1.0577 (low Jan.16) ahead of 1.0563 (near term support line) and finally 1.0540 (20-day sma). On the flip side, a breakout of 1.0719 (high Jan.17) would open the door to 1.0798 (high Dec.5) and then 1.0873 (high Dec.8).