The short squeeze in the euro was sparked not by what Draghi said, but what he did not say. He did not commit the ECB in any way to buy sovereign bonds, which many had expected at least a hint of. Nor did he express the sense of urgency he did in the recent past.
The euro is staging a potential key reversal. It first made a new multi-year low near $1.2280 and now has risen well through yesterday’s high. It is likely to close above there (~$1.2391 according to Bloomberg).Â
This Great Graphic, composed on Bloomberg, shows the euro’s down trend line drawn off the mid-October highs. It has been tested repeatedly, and the euro is approaching it now. It comes in near $1.2465.  A break of this could spark another wave position adjustment that could lift the euro toward $1.26.Â
