Draghi leaves the door to the sweetshop open and the kids fill their boots

The big focus was on what Dragi would say about the moves in the euro. He shrugged it off and the euro has flown

In the preview I wrote that there was really only one line that could help put the skids on the euro rally;

His only real argument today is to fall back on his old message a couple of years ago, when he said the rise in the currency hits inflation. If he takes that line, and says that a move up in the euro will mean a longer path to the ECB’s inflation target, and thus QE running for longer, that could hit the euro. But, he risks going against the positive effects that an improving economy brings, particularly in inflation.

Well he did and said;

Issue is whether FX moves have an impact on the path of inflation
Too early to assess whether pass-trough has taken place

That was as good as it got but not good enough so it sent EURUSD up through the barrier an to a high of 1.2537. That’s topped a near 140 pip move so far over the ECB and that’s probably a big enough move to see signs of a top being formed. We may get some second wind when he’s finished but like I said earlier, watch for signs that the market doesn’t want to, or fails to break the new high. We’ve just dipped below 1.2500 to 1.2481 so we’re treading water for now. Any signs of 1.2500 resisting could mean this phase of the rally is over.