John J Hardy
In this latest webinar, Saxo Bank's head of FX strategy John Hardy analyses the market with topics including synchronised global growth, Saxo’s global risk indicator and data surprises.
Article / 08 September 2016 at 13:17 GMT

EURUSD struggling to hold 1.13 handle after Draghi speaks

Head of FX Strategy / Saxo Bank
  • ECB president Mario Draghi keeps policy largely unchanged
  • EURUSD rises above 1.13 to intraday high of 1.1325 sparked by Q&A session
  • Returns to sub-1.13 levels as markets reassess Draghi comments
  • ECB kept interest rates unchanged 
 Mario Draghi helped push EURUSD above 1.13 after
maintaining an effective status quo. Photo: iStock

By John J Hardy

European Central Bank president Mario Draghi generally under-delivered Thursday as there was no real change to policy: no moving the date to later, no change to the capital key, negative rates, and percentage of issues permitted to purchase among other things.

The outlook on inflation and growth was very slightly downgraded, with risks seen to the downside.

The one thing he mentioned that could be considered dovish was a mention of tasking committees to study an option for the smooth implementation of quantitative easing which could include some of the things mentioned above at future meetings).

Draghi spent a great deal of time underlining the need for structural and fiscal reforms in the closing statement – including infrastructure underlining a global theme.

In the first question in the Q&A, he said the ECB didn’t discuss an extension of the asset purchase plan – taking EURUSD to an intraday-high so far of 1.1325.

In essence, there has been a knee-jerk reaction higher in euro which is clearly deserved, but it is difficult to say this is sustained much longer. If we close day below 1.1275/50, the bears have a hook for a bigger selloff.

If we close higher, I would expect the rally to die somewhere between 1.1350 and 1.1450.

The peaks and troughs of EURUSD post-Draghi
 Source. SaxoTraderGO

— Edited by Martin O'Rourke

John J Hardy is head of forex at Saxo Bank

Relevant articles for you


The Saxo Bank Group entities each provide execution-only service and access to permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on or as a result of the use of the Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. When trading through your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of ourtrading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws. Please read our disclaimers:
- Notification on Non-Independent Invetment Research
- Full disclaimer
- 沪ICP备13028953号-1

Check your inbox for a mail from us to fully activate your profile. No mail? Have us re-send your verification mail