The European Central Bank kept interest rates unchanged (reference: 0.0%, deposit: -0.4%) in line with expectations, but decided to extend the asset purchase program with a monthly rate of EUR 15 billion from October to the end of December 2018 after which the program will be terminated. It is a slightly hawkish signal, though partially discounted by the market participants.

In line with expectations, the ECB lowered GDP forecasts in 2018 to 2.1% y/y from 2.4%, but maintained estimates for 2019 and 2020. Higher oil prices influenced the inflation projection to 1.7%. in 2018 and 2019 from 1.4% predicted earlier. Although the ECB raised inflation projections (2018 - 1.7% vs 1.4%, 2019 1.7% vs 1.4%), it is still a result much below the target ceiling of 2.0%, which is targeted by ECB Council.

Draghi's assessment of the economic situation has mutually exclusive elements. On the one hand, the ECB president claims that the core strength of the economy has not changed, although he stressed that data weakness may last longer than suggested by new forecasts, especially in some countries may cover the entire second quarter. In addition, Draghi warns against underestimating the existing risks for the outlook business.

During the Q & A series, most of the question concerned the date of the first interest rate increase. Draghi reminded that the ECB only stated that rates would remain unchanged at least until the end of the summer of 2019. The Council did not discuss when to make the first hike. The Council believes that the condition of the economy allows QE to end, but the risks for prospects mandate a gentle policy on interest rates. Draghi says in his own way that the economy is fine, but not so much as to discuss rates.

In conclusion, yesterday's ECB meeting supposed to be a hawkish demonstration of the strength of the European economy and the central bank's plans for the future. As a result, however, the whole situation was read by the market as a mix of uncertainty and dovish signals that led to the breaking of important technical levels in terms of Thursday's session.

Let's now take a look at the EUR/USD technical picture at the H4 time frame. The reason for the depreciation of the European currency was the "sale of facts" after the "earlier purchase" of rumors and some key information provided by the central bankers in their remarks. The price has fallen more than 250 pips, from the level of 38% Fibo at 1.1855 to 1.1592. Currently, the price is still trending down despite the oversold market conditions it approaches the technical support at the level of 1.1509. Any violation of this level would only accelerate the sell-off towards the level of 1.4444.