FXStreet (Guatemala) - EUR/USD was recovering in the US after the ECB meeting when the major dumped over a big figure. Although the ECB kept the main policy rate on hold at 0.05%, its was President Draghi's press conference that really set of the fireworks when he signalled that further easing was imminent due to the downside risks to inflation rising since the December meeting and markets have priced in a cut to the deposit rate that is already at -0.3%. But why the rally in the US? Analysts at Westpac Banking noted that EUR/USD plunged after Draghi's press conference, from 1.0895 to under 1.0780, but recovered in NY on no news to 1.0880. " This may be a function of the existing overhang of spec short EUR positions and of course doubts that the Fed will raise rates again any time soon (March is only 22% priced)." For the day ahead, we are quiet in Asia except of course we will be monitoring the Tokyo and chinese performances and whether risk-on can continue onto the Asian close. However, the Chinese seem to have be preempting their Chinese holiday starting February 8th and have already done a great deal to stabilize the markets. The Yuan fix may simply continue to be neutral for the time being, as explained by analysts at Bank of Tokyo Mitsubishi. "With trading calmer it may not be necessary for PBOC to generate more CNH rates shock and awe despite the new RRR deadline Monday." EUR/USD levels Technically, Valeria Bednarik, chief analyst at FXStreet explained that according to the 1 hour chart, on the contrary, the risk remains towards the downside, as the price is well below its moving averages, while the technical indicators turned south after correcting extreme oversold readings. The bearish case, will remain valid as long as 1.0845 holds. "In the 4 hours chart, the technical indicators are currently flat below their mid-lines, giving no clear directional clues while the price is far below its moving averages, all of which should keep the upside limited." For more information, read our latest forex news.