The fact that the US president was hounding a heavy department in the trade conflict with China (commissioned work on tariffs amounting to US $ 200 billion) has worsened the poor sentiment in the markets by lifting the dollar to 11-month highs. The Chinese yuan fell to the levels last seen in January. On the EUR/USD pair, the wells from the end of May (1.1510) were robust, despite again the dovish comments of M. Draghi.

The President of the European Central Bank (ECB) stated at the symposium in Sintra, that the Governing Council "will be patient in determining the moment of the first interest rate hike, and after it will adopt a cautious attitude in adjusting monetary policy". In his opinion, the current path of market rates reflects well the intentions of the ECB. He added that the fact of closing the QE asset purchase program does not mean that the bank completely withdraws the support of the activity. According to Draghi, the economy of the Eurozone is developing dynamically, but there are barriers to growth due to the long period of low investment activity. Capacity utilization is above long-term averages. At the same time, factors that adversely affect GDP are strengthened. The President of the ECB included increased protectionism (steel and aluminum duties), rising oil prices (caused by geopolitical tensions) and persistently high volatility of financial markets. Positive impulses include the expansive fiscal policy in the USA. There is still a need to maintain monetary policy accommodation.

The most important thing in Italian's statement was the confirmation of the promise made during the last meeting of the ECB that interest rates will not change at least until summer next year. Attention about properly calibrated, current expectations of the market as to the first increase in the deposit rate, even dismisses her deadline for the second half of the year 2019. The Euro broadly lost the ground across the board again after this statements from Draghi.

Let's now take a look at the EUR/JPY technical picture at the daily time frame. The pair has dropped towards the 61% Fibo retracement at the level of 126.80 and the bounced towards the level of 127.48. The market is still trading inside of the channel and the recent rally toward the level of 130.39 has failed to break out of the channel again. Momentum remains below its fifty level, so the chances are, that the market will continue the downward move towards the level of 124.60. A breakout through the level of 126.80 will accelerate the sell-off.