The EUR/USD pair surged up to 1.1248, surpassing last week's high, following an optimistic Draghi on the local recovery. The ECB's head added the usual "considerable degree of stimulus still needed," but said also that all signs point to a broad recovery in the Euro Area, given the market the trigger needed to wake up of its lethargy. There were no macroeconomic news in Asia to affect currencies, and the European calendar will also remain empty, with the focus on different Central Banks' authorities, with speeches from RBA´s Debelle, BOE's Carney, and Fed's Yellen outstanding today. The US has also scheduled some minor reports on manufacturing and housing.
The American dollar is clearly the worst performer today, affected by a flattening yield curve, a sign that the market is being lead by weaker inflation, and not policy makers' hawkish stance on rates. Distrust in the US currency is being exacerbated by political jitters, as President Trump's growth promised measures are still out of sight.
Technically, the pair has broken above 1.1220, the level that contained advances for nearly a week, supporting some further advances ahead. In the 4 hours chart, the price has once again found support in a bullish 20 SMA earlier on the day, now trading above all of its moving averages, whilst technical indicators turned sharply higher amid the sudden advance.
The immediate resistance is now at 1.1260, with further advances beyond it exposing 1.1300. Beyond this last, the upward momentum will likely accelerate, with the 1.1340/60 region becoming likely for today.
The mentioned 1.1220 level is the immediate support, with a break below it implying a retest of the 1.1160 region.
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