Draghi hawkish comments raised the bullish bets on the Euro. The cross released the thrust at a maximum speed rose to a week’s high.
Draghi said” All the signs now point to a strengthening and broadening recovery in the euro area. Deflationary forces have been replaced by reflationary ones”.
In his speech, he also said, “As the economy continues to recover, a constant policy stance will become more accommodative, and the central bank can accompany the recovery by adjusting the parameters of its policy instruments”.
The cross manages to hold the 200DMA, rebound strongly and closed above 20DMA. The spikes were paused at 38.2% (1.6230- 1.5230 fall) further hear room expected in the near and medium term.
Last week we forecast a buying trade and the cross responded well in line. The daily RSI and oscillator appear bullish and the journey just started.
In the near term, resistance seems at 1.5650, 1.5750 and 1.5850. Alternatively, support finds at 1.5530, 1.5400 and 1.5300.
In the medium term, the cross has more upside potential for 1.5950/1.6000. A dip below 1.5430 is another buying opportunity in the near term.
It is important to always keep in mind the risks involved in trading with leveraged instruments.
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