After yesterday’s announcement from the ECB proved to be a lack of action US dollar and Japanese strength picked up. Later in the day traders realized they had misread Draghi’s signals to the market.
This was confirmed further today when members of Germany’s Angela Merkel’s coalition parties showed they won’t stand in the way of ECB chief Mario Draghi’s plan to buy government bonds.
The market has shown great resilience from receiving no action from both the Fed and ECB this week. Many analysts expected non action would lead to a dramatic sell off since the action had been priced in. The reverse has occurred - non action has lead to a rally.
Here is a glance at the currency pairs leading the charge and setting up for the best continuation moves next week.
Keep an eye especially on the yen crosses as I expect to see a weaker yen in the coming weak after the intense strength it has been displaying and by the extent of the move of pairs against it today.