Today, Thursday October 26, the US dollar showed some mixed dynamics during the European session leading up to the ECB meeting. It rose against the Kiwi dollar, pound, franc, and euro, while losing ground against the loonie, yen, and Aussie dollar. The euro rate corrected from the Asian high of 1.1837 to 1.1802 (-35) before the results of the ECB meeting were announced. The British pound has lost 60% of the ground it gained yesterday (169 pips), dropping from 1.3279 to 1.3179 (-100 pips).

The European Central Bank’s Governing Council voted to maintain all three rates at their current levels. The main refinancing rate was kept at 0%, the deposit rate at -0.4%, and the emergency overnight borrowing rate for banks was left unchanged at 0.25%. The regulator also extended its QE program until September 2018. Purchases will continue at their current rate of 60bn EUR a month until the end of year, dropping to a monthly rate of 30bn EUR from the beginning of next year.

The euro reacted to this news with a 73-pip slide to 1.1740. Trader attention now shifts towards Mario Draghi’s press conference. I’m not ruling out a testing of 1.1725, nor will I rule out a return to 1.1800. Draghi knows how to induce a reversal when answering questions from journalists.