EURUSD spiked above 1.25 on Draghi but without clear break so far
The Euro was higher across the board in reaction to ECB President Mario Draghi’s press conference after the central bank kept its policy unchanged as expected.
Nothing new or surprising from Draghi today, as he pointed on robust pace of economic expansion; underlying inflation remains subdued and is expected to hover around current levels in coming months before increasing as strong cyclical momentum strengthens the confidence that inflation will converge to its target.
Draghi said that recent volatility in the FX market is source of uncertainty, with little chances for interest rate hike this year.
The single currency spiked to new high at 1.2537 (the highest since Dec 2014) before easing back below 1.25 handle.
Euro showed impressive rally in January, extending rally of previous two months, with signs of further advance after Mario Draghi failed to at least reduce the pace of recent strong bullish acceleration.
Strong bullish signal could be expected on close above 1.25 handle which would lead for extension towards next pivotal point at 1.2597 (Fibo 61.8% of larger 1.3992/1.0340 descend).
Sentiment remains firmly bullish, but overextended daily studies could lead towards further easing, if the pair dips and closes below 1.2400 handle, which is needed for initial bearish signal.
However, current action was so far insufficient to signal buy the rumors – sell the facts scenario, keeping bias with bulls for now.
Res: 1.2500; 1.2537; 1.2567; 1.2597
Sup: 1.2459; 1.2400; 1.2384; 1.2351