Forex: EUR/USD hits 1.3200 on Draghi's comments

FXstreet.com (Barcelona) - The EURUSD soared on ECB's Draghi remarks at the monetary policy press conference. After the announcement of an unchanged refi rate at 0.75%, President Mario Draghi hinted that inflation should decline below 2% during 2013. Also, he said he expects recovery later in the year as confidence improves gradually and bond yields fall. The two LTRO programmes kept banking institutions from disorderly deleveraging. Draghi also called for an integrated financial framework, that includes the single supervisory mechanism, and structural reforms by Eurozone governments.

Investors are pricing in Draghi's comments and the unchanged policy stance, where a rate cut failed to exist. The EURUSD rally has already hit the 1.3200 mark, with a high at 1.3200.

"While we would allow for this to hold the initial test, we are increasingly viewing the recent high at 1.3310 as an interim peak. Failure at 1.2970 will target 1.2675/61", wrote Commerzbank analyst Karen Jones.