Another canceled trade for me! Unlike my GBP/USD forex setup though, I’m actually happy that I didn’t pull the trigger on this one.
Yesterday I pointed out a pretty cool retracement setup on EUR/USD. Of course, I had assumed (like other forex geeks did) that the ECB wouldn’t change any of its monetary policies and biases. Unfortunately, Draghi had other ideas.
In his press conference, Draghi hinted that the ECB is getting antsy about the current EUR strength. He said that its current levels are not helpful given the inflation context. Not only that, but he also said that the Governing Council is comfortable with acting to fight inflation as soon as next month!
No wonder EUR/USD fell like there’s no tomorrow! Since my trade idea was invalidated (both in technical and fundamental sides), I decided to just let go of a euro retracement idea. And it’s a good thing that I did! Price eventually fell below the support levels that we’re looking at and so far there’s no sign of another uptrend. Phew!