Euro Extends Losses, Breaches 1.0663 Support

The sell-off in EUR/USD that resulted from European Central Bank action and President Mario Draghi’s comments afterward accelerated on the breach of 1.0700 and continued through key support at 1.0663 to the three-day low of 1.0616.

For the time being, 1.0600 is providing support, capping the dollar’s gains at 1.25%. But as analyst interpretations of today’s action begin to circulate, selling pressure could be rekindled. The consensus so far is that QE will likely extend until 2018 given inflation projections and Draghi’s assessment that “risks remain tilted to the downside.”

The gains in the dollar versus the euro are permeating the other dollar pairs. USD/JPY is now higher by 0.40% at 114.40, and GBP/USD is lower by 0.33% at 1.2584.

Only the Canadian dollar is higher, largely attributed to higher oil prices and upbeat housing and production data, specifically an 8.7% surge in housing permits in October, beating estimates for a 0.7% drop.