During ECB President Trichet’s speech, EURUSD made a sharp 60 pip southward move towards identified support. The aggressive selling exhibited may have been a false flag.
During his speech, Trichet emphasized the need for price stability and added that the ECB would be primarily concerned with such at its May 7 meeting. He also noted that European nations would need to maintain fiscal sanity. Is he insinuating that profligate spending might lead to inflation? If so, he might be asserting that inflation may be a threat in the coming months and that the ECB will be adamant about fighting it. If such a scenario plays out, the Euro reverse course upwards for the foreseeable future.
