Euro: Now on a medium term bullish run

Via Bloomberg

Via Bloomberg
As I was mulling over the ECB rate decision last week I came across an interesting and helpful piece from the Bloomberg market live blog which I will detail below. The reaction to the ECB rate decision was to put in a firm reversal on the EURUSD pair. The markets live blog made the case for a medium term bullish turning point:
1. Rates – the ECB cut rates, but not more than expected. Euro rates have been deeply negative for years and will stay negative for years and these small moves changes little at the margin. Draghi has also explicitly said that monetary policy has reached it’s limits and fiscal policy needs to step up now
2. Tiering – Is finally here and should relieve the impact of negative rates. The suffering of the European banking sector has been dragging on the regions economy. Tiering is a positive for the Euro, even if it is mild
3. QE – ECB officials have shown that they will do whatever it takes for however long it takes. This is a positive for the Euro as it removes tail-risk outcomes enhancing the euro’s appeal as a reserve currency, and a potential haven asset.
Ok, that was the heart of the article and one takeaway we can definitely take from this is thatany news of fiscal policy stimulus from the eurozone will be euro positive. One headline to watch out for, as it should be good for a quick +50 on the EURUSD when it comes.