What happened to the EUR/USD on Thursday the 10th?
On Thursday the 10th the EUR/USD pair at one point reached the price bottom 1.0828, dropping around 150 pips since the beginning of that day, then the pair changed direction and moved up more than 300 pips, closing the day above R2 weekly pivot point.
So what caused this high volatility?
Initially, on Thursday the EUR weaken on ECB rates cut. The European central bank lower interest rates to a new record low of 0%, leaving market watchers shocked as no one expected such change.
The central European bank also cut the deposit facility rate to negative 0.4, meaning bank depositors will pay 0.4% to the bank for keeping their deposits within.
Then came the turn, from 1.0830 the EUR/USD made a strong up-movement towards 1.12, around 300 pips pullback.
Why?
Short time after the ECB rates cut, Mario Draghi announced interest rates will not likely to drop more than that. In addition, the ECB announce it will increase its quantitative easing program by additional $20 billion to the total amount of $80 billion a month. The increasement in the quantitative easing amount sparked confidence among traders and the EUR rise respectively.
Eventually, the bounce-up stopped when the U.S. Department of Labor said on Thursday, that the number of individual filling for jobs decreased by 18,000 to 259,000 from previous 277,000.
On Thursday the 10th the EUR/USD pair at one point reached the price bottom 1.0828, dropping around 150 pips since the beginning of that day, then the pair changed direction and moved up more than 300 pips, closing the day above R2 weekly pivot point.
So what caused this high volatility?
Initially, on Thursday the EUR weaken on ECB rates cut. The European central bank lower interest rates to a new record low of 0%, leaving market watchers shocked as no one expected such change.
The central European bank also cut the deposit facility rate to negative 0.4, meaning bank depositors will pay 0.4% to the bank for keeping their deposits within.
Then came the turn, from 1.0830 the EUR/USD made a strong up-movement towards 1.12, around 300 pips pullback.
Why?
Short time after the ECB rates cut, Mario Draghi announced interest rates will not likely to drop more than that. In addition, the ECB announce it will increase its quantitative easing program by additional $20 billion to the total amount of $80 billion a month. The increasement in the quantitative easing amount sparked confidence among traders and the EUR rise respectively.
Eventually, the bounce-up stopped when the U.S. Department of Labor said on Thursday, that the number of individual filling for jobs decreased by 18,000 to 259,000 from previous 277,000.
Exactly
