Draghi and Company Stick a Fork in the Euro

“Stick a fork in it – it’s done!” is a common expression one hears down in Texas during Bar-B-Q season.
One could say the same thing about the Euro after the ECB slashed interest rates from 0.15% to a paltry 0.05%. I suppose the only thing left is to slash to absolute zero at this point and start handing out money to the general public.
Regardless, the Euro went “KERPLUNK” and the Dollar soared higher as the interest rate differentials between the two continue to be accentuated in the minds of forex traders.
Take a look at the Euro chart below. After a brief period of consolidation in early August, the currency has been careening lower, crashing through one layer of chart support after another.
If today’s low near the 1.300 level fails to generate any buyers, another 200 point plunge to down near 1.2800 is not out of the question. The RSI is deeply oversold but when it comes to currencies, oversold or overbought rarely mean much if anything. With the Eurozone economy sluggish at best ( and being hurt by sanctions imposed on Russia ), there is simply not much reason for traders to turn aggressive buyers of the common currency as the Central Bank is trying everything but its own version of QE at this point.

This post was published at Trader Dan Norcini on September 4, 2014.