Euro rallied against the US Dollar (USD) on Thursday, increasing the price of EURUSD to more than 1.1200 following the European Central Bank (ECB) monetary policy announcement. Extreme volatility is being noticed in all Euro pairs after some of the most unprecedented monetary policy decisions by the ECB head Mario Draghi.

Technical Analysis
As of this writing, the pair is being traded around 1.1177. A hurdle may be noted near 1.1218, the intraday high of yesterday ahead of 1.1376, the swing high of the last major upside rally and then 1.1400, the psychological number.

On the downside, the pair is likely to find a support around 1.0904, a major horizontal support ahead of 1.0821, the intraday low of yesterday and then 1.0800, the psychological number. The technical bias will remain bullish as long as the 1.0821 support area is intact.

ECB Monetary Policy

The ECB cut its main interest rate from 0.05% to 0% and cut its bank deposit rate, from minus 0.3% to minus 0.4%. The bank will also expand its quantitative easing programme from €60bn to €80bn a month. The governing council expected the bank’s key interest rates “to remain at present or lower levels for an extended period of time, and well past the horizon of our net asset purchases. The bond-buying programme will continue at least until the end of March 2017.

Trade Idea

Considering the overall technical and fundamental outlook, buying the pair around current levels appears to be a good strategy in short to medium term.

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