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ECB announces its Bond Buying Program

After cutting back the key interest rates across the euro zone today ECB has now announced an asset backed securities program to recover the growth and inflation in the area. In the press conference Draghi said that the ECB will start to purchase a broad portfolio of euro dominated covered bonds. The risk in the euro area seems to be skewed to the downside. ECB has also cut its Inflation forecast for this year to .6% down from the previous forecast of .7%.

EURUSD : 4 Hour Chart

The pair EURUSD is now seems settled and didn’t extend losses following the ABS program announcement. Currently testing support at 1.2994 which earlier also acted as support for the pair. Seems like investors have now got some insight what ECB think and about the euro zone growth in future. The pair is steady and is expected to continue follow the downtrend.The next target support level for the pair is at 1.2753.