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EUR/USD back into the bears den, downside wide open

FXStreet (Guatemala) - EUR/USD is trading at 1.2391, down -1.21% on the day, having posted a daily high at 1.2569 and low at 1.2375.

EUR/USD has settled in for a negative close for the week and a touch of the November lows. Just as markets were weighing up whether the dollar has any more “go” in it, Draghi delivered his most dovish speech of recent times indicating that they are likely to act in some shape or form and soon and markets are set for action to take place at the next meeting.

Draghi has indicated that they are prepared to do whatever it takes to lift inflation to their target, almost as a matter of emergency. Analysts at BBH explained that Draghi's comments hold out the possibility that the ECB will announce an increase in the range of assets it at the next meeting, at which the staff macro forecasts are likely to be cut again.

EUR/USD downside wide open again

The EUR/USD outlook had been quite mixed, with concerns over the US dollars strength and whether it could be sustained in current and worsening global growth conditions. However, as noted by Camilla Sutton, CFA, CMT, Chief FX Strategist at Scotiabank, “Today’s large and aggressive downside move opens up a test to the recent low of 1.2358, a break below here opens up a test to 1.2300, which we expect to eventually fall sustainably towards."

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