The euro managed a small bounce to 1.3405 areas after touching the low at 1.3369 but the recovery was likely just some profit taking by traders after this morning’s two figure collapse following the ECB press conference. Euro slipped again to 1.3380 after the run up and is still under pressure. ECB President Mario Draghi's dovish and weak EMU economy comments gave the market all the excuse it needed to rebalance positions on the two leg rally since July. Mr. Draghi's successful verbal intervention in the summer has certainly enhanced his credibility with the markets.
Euro selling on the day came from all types of accounts and quarters and was enhanced by the lack of profit taking on the mid-January to February ascent.
The strongest support is now at 1.3175, the top from September to December and then the bottom until early January. Above that lower limit there is support at 1.3240, 1.3275 and 1.3325. Good resistance in a band at 1.3450-70.
Chief Market Strategist