The European Central Bank delivered their interest rate decision in the early afternoon, as expected held rates at 0.00%.
In the press conference shortly afterwards, the ECB confirmed the end of the bond buying program which was used to stimulate the Eurozone’s inflation. Both fundamental outcomes were expected from investors.
Draghi’s bearish comments caused fresh uncertainty as Draghi pointed that whilst “risks are balanced, they are now moving to the downside”. Adding that this was due to a range of concerns including geopolitics, protectionism and market volatility.
There was no significant movement on the Euro crosses, a slight appreciation that was stalled as price headed into the evening closures. EUR/JPY remains trapped within a 125pip range between 128.000 and 129.250 meanwhile EUR/USD stays within a slightly tighter 100pip range-play.
As specified in our recent Market Breakdown videos, during the Christmas period the market usually enters thinner volatility as larger market players take their holidays, subsequently leaving price between two barriers until a breakout occurs.
A breakout to the downside on both pairs could see price revisit the 1.12 lows against the Dollar, where as a 128.000 key level break would put 125.000 in sight for EUR/JPY.