ECB Press Conference on March 7 started off with a reiteration of recent comments but Draghi’s tone soon turned upbeat as soft data indicated improvements in the overall Euro area; although the Staff Projections downgraded growth and inflation for both 2013 and 2014, there were was mainly due to the “carryover” declines from the fourth quarter of 2012, as Draghi called it. Overall the ECB Press Conference was rather positive, as reflected in the price action of the EURUSD, which moved from the 1.3000 to the 1.3100 during and immediately after the ECB Press Conference.
Here are some highlights to the ECB Press Conference:
ECB Press Conference – Prepared Speech
ECB Press Conference – Q&A
How to interpret ECB Press Conference?
Regardless of what was actually said during the Press Conference, Draghi’s tone today was particularly upbeat to say the least. For instance, when Draghi was asked about the downgrade of Staff Projections and the market volatility following the Italian election, Draghi basically downplayed the former and outright dismissed the latter, which in my opinion says a lot about ECB’s position, at least for this month… And I don’t know if it is just a coincidence, but I did mention this in my traderoom yesterday that Draghi will probably be upbeat tomorrow, and it seems that I am right on the money, that Draghi is playing yo-yo with the market, with one month positive, one month negative, and again positive for this month…
Because of this “revelation”, I believe EURUSD will probably find strong support in the recent ranges, (ECB Press Conference usually sets the tone for the Euro for the rest of the month) and could even make another attempt to retest the 1.33 ~ 1.35 level, if we don’t get any negative surprises. Of course, my view now has changed (temporarily) to BUY on dips, as close to the 1.3000 as possible, because it is not only a psychological level, but also technical backed by fundamental.
ECB Press Conference Helps To Boost The Euro
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