EUR/USD skyrockets to highest level since August 2015 above 1.16

After easing to 1.1480 following the ECB's decision to keep its monetary policy unchanged, the EUR/USD pair caught a fresh buying wave as the ECB President Draghi adopted a hawkish tone during the press conference and reached its highest level in nearly 23 months at 1.1660. As of writing, the pair is trading at 1.1653, up 1.21% on the day.

Draghi reiterated that the underlying inflation was yet to show a convincing sign of a pickup, but he also argued that factors holding back the inflation would last for some time though they were not permanent. Although his introductory statement didn't include any major surprises, he finally suggested a timetable for discussing the QE tapering, which markets took as a sign towards a possible policy change at the end of the year. According to Draghi, policymakers would start discussing potential changes to the QE program in the autumn. 

• ECB's Draghi flags QE tapering talks in autumn

On the other hand, the US Dollar Index came under a renewed selling pressure on reviving political turmoil in the U.S. According to a recent Bloomberg story, "the U.S. special counsel investigating possible ties between the Donald Trump campaign and Russia in last year’s election is examining a broad range of transactions involving Trump’s businesses as well as those of his associates, according to a person familiar with the probe." At the moment, the DXY is testing the 94 handle for the first time since June of 2016.

Technical outlook

1.1713 (Aug. 24, 2015, high) is the next target for the pair and in case this level is broken, the pair could aim for 1.1790 (Jan. 15, 2015, high) and 1.1870 (Jan. 11, 2015, high). On the downside, supports could be seen at 1.1616 (former resistance), 1.1500 (psychological level) and 1.1440 (20-DMA).