Euro Tumbles on Draghi Comments
The euro tumbled sharply on Draghi comments. ECB policy hints drove selling pressure. Markets reacted to dovish tone. This created strong downside momentum in EUR pairs.
Mario Draghi’s comments at the ECB conference regarding further stimulus has led to a dramatic fall in the euro across the board, and the eurodollar in particular. This weakness, however, was first signaled last week, and has been developing since the start of the trading week, and is a follow through from the two bar reversal posted on the daily chart.
Today’s price action on the eurodollar daily chart has resulted in a volatility candle being triggered given the extreme move, and if there is no follow through, then it should be surprise to see the price action simply retreat to within the spread of today’s candle.
In addition today’s price move has seen the eurodollar move back through the volume point of control.
Volume Price Analysis Insights
Volume price analysis (VPA) confirmed the tumble. High volume on down candles showed conviction. No buying support appeared. Quantum currency strength indicator highlighted EUR weakness relative to USD.
Trading Lessons from the Event
Events like Draghi comments create volatility. VPA helps navigate reactions. Wait for volume confirmation on moves. Anna Coulling’s approach with Quantum tools spots sentiment shifts early for timely trades.
Euro tumbles like this reward prepared traders. Quantum indicators on MT5 or NinjaTrader make analyzing policy-driven moves reliable. Stay alert for central bank impacts.
Will The Euro Ever Fail
No, the euro is unlikely to “fail” in the foreseeable future—but it’s not impossible in extreme scenarios.
The euro has proven remarkably resilient since its launch in 1999 (physical notes/coins in 2002). It’s the official currency for 20 EU countries (Eurozone, ~350 million people) and the second-most held reserve currency globally (~20% of reserves vs USD’s ~59%). It survived:
- The 2008 global financial crisis.
- The 2010-2012 sovereign debt crisis (Greece nearly exited—”Grexit” fears).
- Brexit, COVID-19 economic shock, and 2022 energy/inflation spikes.
“Failing” could mean:
- Complete breakup: One or more countries exit (e.g., Italy or France leaving).
- Replacement: By national currencies or a new system.
- Hyperinflation/collapse: Like historical currency failures (rare in developed blocs).
Why It’s Unlikely to Fail Soon
- Institutional Strength: The ECB has powerful tools (rate setting, bond buying via QE/PEPP). Political will to preserve it is high—leaders repeatedly say “the euro is irreversible.”
- Economic Integration: Deep trade/financial ties make exit costly (e.g., Greece stayed despite austerity).
- No Major Exit Momentum: Even populist parties (e.g., Italy’s League) have backed off euro-exit talk post-2018.
- Reserve Status: Global demand supports stability.
Expert consensus (IMF, ECB, economists like Nouriel Roubini or Paul Krugman): The euro has structural flaws (no full fiscal union—countries can’t print money independently) but strong survival incentives. Breakup risks are low (~5-10% probability in next decade per some models).
Potential Risks for Failure (Long-Term)
- Political Fracture: Rising nationalism or major crisis (e.g., another debt blowup) could force exit.
- Asymmetric Shocks: One country suffers (e.g., recession) while others boom—no easy adjustment without own currency.
- External Pressure: Geopolitical events or USD dominance erosion.
But these are tail risks. The euro’s design flaws are known and managed (e.g., banking union progress, recovery fund post-COVID).
Bottom Line
The euro won’t “fail” soon—it’s too big to fail without catastrophic EU fallout. Reforms and political commitment keep it alive. Traders treat it as permanent but watch crises for volatility (EUR pairs spike on bad news).
By Anna Coulling