The euro is rallying in the immediate aftermath of the ECB decision here, focusing on the fact that the central bank decided to raise rates by more than expected. Odds between a 25 bps and 50 bps move were a coin flip coming into the decision, which explains the euro jump as punters on one side of the table take home the stakes.
There was also the announcement of the anti-fragmentation tool i.e. TPI and the only real detail we got on that were that "purchases are not restricted ex ante". It is now up to Lagarde to try and bring that home but so far, bond spreads are not convinced as there is also Italian political risks in play at the moment.
Going back to the euro, it has rallied from 1.0195 to a high of 1.0260 against the dollar. The jump comes after buyers defended a push towards the 100-hour moving average (red line) earlier today. However, despite the optimism, there is still a key technical hurdle to push through in the bigger picture.
There is still the 50.0 Fib retracement level at 1.0283 to get above in order to convince of an extension of the recent upside bounce from parity. If Lagarde fails to satisfy euro bulls later on, I fear that the 50 bps "surprise" will prove to be short-lived as outlined here earlier in the day.
