The euro fell against the green back and other major currencies on Thursday after the European Central Bank launched a large scale quantitative easing program in an attempt to combat slowing growth and inflation in the euro area.ECB President Mario Draghi said it will make monthly purchases of €60 billion per month, starting in March and continuing until late 2016.
The €1.2 trillion program will sizably increase the ECB’s balance sheet Draghi said. The move should also strengthen demand and support money and credit growth and help return inflation back to the bank’s 2% target. Draghi acknowledged the action the ECB took last year was “insufficient” to ward off the threat of deflation in the region. The annual rate of inflation in the euro area fell into negative territory last month, dropping 0.2%.
Draghi said the risks to the euro area recovery remain to the “downside” but added that today’s action should bolster the outlook. He noted that lower oil prices should help households and support a wider recovery.
“However the euro area recovery is likely to be dampened by continued high unemployment and high public debt” he added.
Intraday bias remains strongly downtrend as 21 and 55 EMA’s are crossed downward on the 1 hour, 4 hours, daily, monthly and weekly time-frames. SSRC and MACD shows more bearish momentum is expected but the Relative Strength Index is signalling an oversold market so i recommend selling the rips after a decent retracement. Am expecting more decline to 1.13000 psychological levels.
Later in the day, investors would be taking a close look at the French and German Flash Manufacturing PMI.