However, the surprisingly weak ECB action triggered long buys in a beleaguered euro currency that fad fallen in the weeks leading up to the meeting. Additionally, Fawad Razaqzada, a technical analyst at Forex.com, argues that further gains in the euro were the result of a short squeeze, MarketWatch reports. Investors with heavy short positions are forced to cover, or buy back, their shorts in the event of a sudden share appreciation and buying momentum from short sellers covering their options contracts help bolster share prices even further.
“The ECB surprised the market — but it wasn’t the kind of surprise that investors were expecting,” Razaqzada told MarketWatch.
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Max Chen contributed to this article.