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EUR/USD pauses for a breath after ECB fireworks

FXStreet (Córdoba) - EUR/USD was crushed and briefly fell below the 1.3000 level after the European Central Bank surprised by cutting key interest rates and announced an asset buying program.

ECB surprises

The ECB cut the interest rate on the main refinancing operations to 0.05% from 0.15% and the deposit rate to -0.20% from -0.10%, and announced it will start purchasing non-governmental securities and asset-backed securities (ABS) next month. The details of the plan will be released after October 2nd.

Easing measures are aimed to underpin growth in the Eurozone and fight deflation. However, the ECB refrained from committing to unlimited sovereign QE.

EUR/USD dropped more than 150 pips and hit its lowest since July 2013 at 1.2995, but it managed to climb back above 1.3000 soon after. At time of writing, EUR/USD is trading at 1.3006, recording a 1.09% loss on the day.

EUR/USD levels ahead

So now that EUR/USD has pierced the 1.3000 level, next supports are seen at 1.2962 (Jul 11 2013 low) and 1.2923 (Jul 3 low). On the flip side, resistances could now be faced at 1.3109 (Sept 2 low) and 1.3159 (Sept 3 high).

USD/JPY trades at pre-central banks levels

No matter the noise, the USD/JPY jumped to 105.20 and fell to 104.75 before returning to pre-central banks prices around 105.00.
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