EUR/USD Forecast Dec. 7-11

EUR/USD had a week for the history books, surging hundreds of pips on Draghi’s failure to delivery. Is it beginning a long upwards path or has it reached a new balance? The upcoming week features data from Germany and France. Here is an outlook for the highlights of this week and an updated technical analysis for EUR/USD.

The ECB cut the deposit rate by only 10bp and did not increase monthly buys. The extension of the QE program by 6 months and the pledge to reinvest proceeds was certainly not enough for markets. Expectations, created by the same Draghi, were not met, and this sent EUR/USD skyrocketing close to 1.10 in a very dramatic move that included false headlines and a failed attempt to promise more. Some of the data justifies doing less, but inflation doesn’t look good. In the US, Janet Yellen cemented a rate hike and the NFP was certainly satisfactory for the initial hike, as markets already look into 2016.

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