EUR Trading Outlook (03-10-2014)

EUR/USD Europe held EUR/USD to a relatively tight range as the mkt awaited the ECB decision and Draghi’s presser. NY walked in with the pair near 1.2640. The ECB kept rates unch as expected. EUR/USD lifted a bit after the decision as general USD weakness took hold. The lift accelerated during Draghi’s presser. There was no mention of QE beside that the bank is ready to use it if needed. Draghi did go over some details of the ABS/covered bond buys but wasn’t specific about amounts. He did spend a fair amount of time government fiscal policy and structural reform and pointed out he trust France to take the needed steps for reforms. He also noted that the ECB can’t lower rates any longer. Traders seemed a bit disappointed with Draghi and short covering ensued. A rally to 1.2692 took hold. A bout of JPY strength drove EUR/JPY from 137.63 to 136.86. EUR/USD dipped as well & hit 1.2625 but USD weakness remained the them and the dip was bought. The pair hit a 1.2699 high before it dipped near 1.2980 late in the day. US jobs are the mkt’s next cue.