The EUR/USD gave up its entire gains yesterday despite being sharply higher at the start of the session. The move was initiated on profit-taking around the 1.3965 level before gathering pace as Mario Draghi, the ECB President, verbally intervened by saying the single currency is “becoming increasingly relevant in our assessment of price stability" and that the risks of deflation were "quite limited" at present. As pointed out on Twitter yesterday, 1.3965 was a Fibonacci extension level, namely the 161.8% extension level of the small pullback from last week’s high. As a side note, Fibonacci extensions are used by ... (full story)