EUR/USD jumps to fresh 20-month high of 1.1942 on Draghi

EUR/USD extended post-Yellen gains to a fresh 20-month high of 1.1912 after the ECB President Draghi, while speaking at the Jackson Hole Symposium, expressed confidence in the global economy recovery. 

Draghi said that the global recovery is firming up, but warned that without stronger potential growth, the cyclical recovery seen globally will ultimately converge downwards. He also expressed concerns about the growing threat of trade protectionism. He added further that the European consolidation is behind US. 

As of now, the markets are focusing on the positives from President Draghi. Thus, the EUR is scaling new multi-month highs. 

Meanwhile, across the pond, the US 10-yr treasury yield is down 2.3 basis points and that is hurting the US dollar. 

EUR/USD Technical Levels

A major resistance is seen at 1.20 [psychological hurdle], which, if breached would force Call writers to unwind their positions, which in turn could yield a bigger rally to 1.2042 [July 2012 low] and 1.21 [zero levels]. Note that the CME EUR/USD Sep expiry options data for Aug 25 had shown highest cumulative OI build up in 1.20 Call.