After a number a negative sections, markets around the world have recovered after European Central Bank President Mario Draghi signalled the bank would do whatever was necessary to hold the euro zone together. There wasn’t any specifics if Greece was part of the plan.
The Euro jumped more than hundred points after hitting the lowers in two years against the USA dollar. The rebound was due but there isn’t any warranty that the rally is going to be supported. The Euro chart is indicating that the currency versus the dollar has been oversold and might reverse to reach the $1.24-$1.26 level by the end of the year. But with current unstable markets any technical reading could fall apart.
ECB might re-start its Securities Markets Programme (SMP). Which allows the ECB to buy European government bonds from banks and other financial institutions on the open market. Thus eurozone governments can borrow money at rates lower than those in the commercial bond markets.
ECB comments came after more than a week of market decline. Markets around the world have been heavily in oversold levels. Investor will be curios if the rally will be supported next week.