EUR/USD fades the spike to 1.2450, back around 1.2400

• The pair quickly reversed the bull run to daily highs in the 1.2450 area.
• ECB stays optimistic on the euro area outlook.
• The central bank remains vigilant on inflation and on potential trade wars.

After climbing as high as the 1.2450 area, or weekly tops, EUR/USD has now reverted the uptick and has returned to the 1.2400 neighbourhood as Draghi’s press conference is underway.

EUR/USD gains capped in the mid-1.2400s

Spot climbed further on Thursday following the ECB statement, where the central bank dropped the pledge to buy more assets if needed, as markets have broadly anticipated.

However, the pair has given away earlier gains in response to Draghi’s concerns on protectionism, while he added that any trade disputes should be resolved multilaterally.

EUR also suffered the unconvincing view of the Council regarding inflation, which is now seen lower in 2019 amidst a persistent lack of traction.

In the same line, the central banker noted that there was little discussion on other possible changes, ruling out any hint at QE tapering, at least in the near term.

Regarding the recent Italian elections and the victory of euro-skeptics, President Draghi declined to make any comments, although he reasserted that the ‘euro is irreversible’.

EUR/USD levels to watch

At the moment, the pair is losing 0.16% at 1.2391 and a break below 1.2334 (21-day sma) would target 1.2317 (10-day sma) en route to 1.2272 (low Mar.1). On the upside, the next hurdle emerges at 1.2446 (high Mar.8) seconded by 1.2537 (high Jan.25) and then 1.2557 (2018 high Feb.18).