EUR/USD retreats over 100-pips from post-ECB swing highs, plummets to mid-1.2300s

   •  Quickly reverses ECB-led bullish spike to 1.2445 supply zone.
   •  Draghi’s comments on subdued inflation prompt aggressive selling.
   •  Technical studies suggest follow-through weakness in the near-term.

The EUR/USD pair extended its post-ECB retracement slide from 1.2445 supply zone and tumbled to fresh lows in the last minute.

The shared currency did rally after the European Central Bank dropped an explicit pledge to increase the size of QE, which was seen as a hawkish signal. The pair jumped to near three-week tops but the up-move quickly ran out of steam as the ECB President Mario Draghi's post-meeting press-conference got underway.

Draghi's comments, saying downside risks include FX and that inflation remains subdued, reaffirmed by a downward revision of the central bank's inflation forecast for 2019, failed to assist the pair to break through the 1.2445-50 immediate resistance and prompted some aggressive selling.

Meanwhile, a goodish pickup in the US Dollar demand, supported by easing fears of a global trade war, further collaborated to the pair’s sharp retracement slide of around 100-pips from session tops, to mid-1.2300s.

With the key event out of the way, the downfall could also be attributed to some long-unwinding trade and hence, a follow-through weakness, further towards the 1.2300 handle, now looks a distinct possibility.

Technical levels to watch

Weakness below the 1.2335-30 immediate support would reinforce the bearish expectations and accelerate the fall towards the 1.2300 handle before the pair eventually slides further towards 1.2255-50 support.

On the upside, the 1.2380-1.2400 region now seems to act as an immediate resistance and any subsequent up-move beyond the mentioned hurdle might continue to confront fresh supply near mid-1.2400s.