The ECB President, Mario Draghi, speaking at an event on Wednesday, said that the central bank was concerned about the prolonged effects of negative interest rates. The ECB has been keeping interest rates negative for nearly five years to spur lending. The shift from the ECB comes as it ended its QE program in December last year and will be launching a new round of cheap financing for European banks.
Can the EURUSD Reverse Off the Support?
The common currency continued to decline as price was seen trading just outside the support area of 1.1268 – 1.1251. While price action is currently signaling a possible retracement, a close above 1.1268 is required to confirm this. The Stochastics on the 4-hour chart is oversold indicating a potential bounce. However, prices are likely to remain subdued in the near term. A bearish follow through could see the EURUSD reaching for 1.1217 support.
