With the beginning of the press conference the rally in the Euro has started. Expectations must have been low. Obviously Lagarde managed to surprise the market with more hawkish rhetoric and the ECB has even increased their inflation prospects this morning from 1.9% (dec forecast) to 3.0% (today) finally! “Goldman Sachs expects the European Central Bank to raise interest rates by 25 bps each in September and December” now (reuters). After months of dovish transitory talk it's hard to imagine.
From a technical perspective there is not much resistance left in the currency pair except for 1.1482/83 (yearly highs) after EURUSD has reclaimed all important levels easily this trading week. From the data side the market is awaiting US NFP numbers this european afternoon. With a very strong print there might be a little chance of a comeback of the Dollar but would I bet on it?
The Dollar Index looks battered but that is in the nature of things. It looks strong at the top and weak at the bottom. Above the 95 treshold you might look for a tactical long but it says '‘don't try to catch a falling knife” (investopedia) and we do not know yet where the bottom is.
Good luck,
Sebbo