Mario Draghi caused chaos on currency markets

The European Central Bank lowered deposit rates by 10 basis points, from minus 0.3 percent to minus 0.4 percent, a decision which coincided with forecasts of analysts, although some of them predicted even more serious decline to minus 0.5%.

Separately, the monthly volume of the program for purchases of assets was increased from 60 bln 80 bln euro and the range of assets has been expanded to include non-bank corporate bonds denominated in euros. In addition, the ECB will launch a new series of long-term refinancing operations with a maturity of four years.

Minutes after posting the news the euro retreated sharply against the dollar to around 1.0821, but later turned up and closed higher at 1.1217 in highly volatile market. Technically, the price closed the day above the 200 day EMA, suggesting bullish outlook testing the trend line resistance, localized around 1.1300. Short-term expectations are upwards. The nearest support is at 1.1135. A clear break below that area could lead price to neutral trading zone testing 1.1065 support.