Signor Draghi does the business, at least for now

The EURUSD pair made a strong reversal to its trend of the last several weeks on the comments of the Chairman of the European Central Bank at the monthly press conference of the Monetary Policy Committee yesterday. Click on the picture above to get the full video of the introductory comments to the press conference.

The market only heard that "recent indicators suggest that economic activity should stabilise in the first half of 2013, with a gradual increase in the second part".

That was enough to convince participants that the pair was not about to break through the strong support around 1.30 that we have been highlighting here, and to start the short covering that was inevitable in the event of such a realisation.

The market seems to have missed, for now, the assertion by Sig. Draghi that tight credit conditions will continue to weigh on demand; that inflation expectations are well anchored and that the ECB continues to see downside risk to the recovery in the Euro area.

All of these things are negatives for the Euro.

Later on in the global day today (March 7 2013) we will have the Non-Farm payrolls announcement in the USA. This can be expected to cause further volatility in this pair.