Looking past near-term volatility triggered by conflicting jawboning efforts from central bank officials, the trajectory of Fed policy – namely, looking to reduce stimulus by tapering QE asset purchases at some point in 2014 – stands in stark contrast to that of the ECB. While President Mario Draghi talked down the prospect of negative deposit rates, the tone of the bank’s forward guidance presents it as decidedly open to further accommodation.
I’m holding short from 1.3362, initially targeting 1.3148. A stop-loss is set to trigger on a weekly close above 1.3577.
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