There's been much conjecture, hype and second-guessing in anticipation of today's announcements from the European Central Bank

Majority of opinion now seems to be leaning toward some action from Draghi @ Co with Goldman Sachs leading the calls for a rapid drop in the euro by as much as 300 pips on EURUSD

I'm a contrarian by nature and I still think that the ECB will remain on the cautious side even if they do ease/cut depo rate, but yesterday's Eurozone inflation data has certainly given the bears some additional reason to believe as Ryan pointed out in this post

As I have said previously though what remains key is how much of the potential easing is factored in already, and that we won't really know until the facts are known and reflected in the price action

I don't see EURUSD dropping like a stone and even with accelerated falls we will see shorts stepping in to take some money off the table. In any event today attention will equally be on the FOMC decision on 16 Dec which still remains an unknown even if Yellen did give off some hawkish tones yesterday. Again I expect them to remain on the side of caution and I do believe that China has more than a passing interest to prevent EURUSD from falling too far.

However should both extreme ends of the scenario prove correct ( ECB easing/FOMC hiking) then yes it will be difficult to stand in the way of a falling euro but then what?

Well, ECB easing could be viewed to be positive in the longer-term if it helps get inflation heading back in the right direction and a US rate hike could seriously hamper further economic recovery over there. For that same reason I remain firmly of the view that we will see no UK rate hike for many a month regardless and probably not in 2016 at all

But easing of mon pol by the ECB is not guaranteed to help inflation back toward the 2% target especially if oil/commodity prices remain low/head even lower as I expect them to do.

Hey listen, I'm not wanting to sound like, or be, the prophet of doom but as I look around me I just don't see much to be that cheery about in the global picture, with the economic climate just part of my concerns. So short, medium or long term the overall outlook remains the same for me. Soggy to say the least

And where does that leave the euro today and where might we see the biggest action/fall out ? Well all roads start and lead back to EURUSD but we must be very much aware of the impact in other ccys too. AUD,NZD,CAD, will not be immune to the knock-on impact although we can expect to see more volume reaction in EURGBP and EURJPY and therefore GBPUSD and USDJPY.

I don't do predictions as you know so there's no/little point in giving specific levels but as a rule of thumb we will see large EUR moves higher in the event of the ECB doing nothing/less than expected and that in turn should provide supply into contra ccys. Of course the reverse is also true but I repeat we will only know what is factored in when the facts are known and subsequent price action seen.

Clearer now ? Nope, of course not. Life and forex aren't that straight-forward and many questions will still remain unanswered but as always, I suggest you don't over analyse.

Yep, "trade what you see" may be a bit clichéd but remember another little mantra I use.

"Ours is not to reason why, ours is just to sell and buy"