I've shaken the chart tree and this is what's fallen from it

There's been a couple of fence sitters in the guess the euro price post, but the overwhelming consensus is that the price will be higher due to Draghi under delivering.

Wherever we think it might go we always need to look at where it could go.

UP

  • 1.1000/10 has been a minor S&R level of late and too close to the price. It might develop in strength if we see a big downward move first.
  • The much talked about 200 dma at 1.1043 comes into an area from 1.1040-55 that has shown as resistance at various times late 2015 through to this week.
  • 1.1085/90 marks a relatively stronger level of S&R ahead of 1.1100, which holds the 50 fib of the Feb move down from 1.1375
  • I'm not seeing much that's very clean or standout above 1.1100. 1.1130/40 is one level that sticks its nose out a tiny bit
  • 1.1165 is the 61.8 fib of that Feb move and 1.1180/85 will likely hold resistance in front of 1.1200
  • 1.1215/20 might hold some trouble should we break the big figure, followed by 1.1235/45
  • After that it's a case of the usual areas of the 80's and 00's (1.1280 & 1.1300)
  • The Feb high at 1.1375 needs watching if we get a big blow up

Overall I'm not to keen on some of the higher levels. When I do these posts I like to look for nice clean S&R areas and this picture is looking a little too messy. Still, we've got some number to work with so they'll go into the old memory box.

Down

  • Right now we're pivoting the 55 dma
  • 1.0940 has been where the price has found resistance momentarily before breaking up to 1.0970. If you look at the H4 chart from Dec you can see that the price held, broke, break failed, held, broke, break failed, and so on. That move stands out more in Jan. It was also the low yesterday and Monday. It's too close to the current price but again, it's a level to watch if we see a big drop initially
  • 1.0900/10/15 (the 100 dma) will have limited big figure support while 1.0880 might be stronger
  • The area around 1.0820/35 was once another strong range bottom all the way back through to March last year.
  • 1.0800 was the safety net if 1.0820/35 broke
  • 1.0770/75 was support on a couple of occasions this year while the year's low sits at 1.0710
  • If that low and 1.0700 breaks that could give us a quick trip down to the low 1.06's and that will put some greater focus on last years lows. 1.0650 could halt that slide. If not 1.0634 will need to step up to the plate or 1.05 beckons

EURUSD H4 chart

The main issue today is that this is not just a figure popping up that we then have to decipher into a meaning. That part might happen at 12.45GMT if they cut rates but the rest will come during the presser. As we know Draghi can just drop a line in at any point, though the statement is where we should get most of the details.

To summarise, there's 3 places we need to be vigilant.

  1. 12.45: If we get a rate move the market will instantly judge whether it's above or below expectations. That might lead traders into a false sense of security. Say we get a cut of 0.05/0.10bp, the initial reaction may be for the euro to rise. That move might be scuppered in the presser if there's more.
  2. Draghi's statement: Where any other moves will be announced. Probably the main event. Any news tools will be explained. This is where we'll get a sustained direction in the euro
  3. The Q&A: The big risk. Whatever comes before can be added to or lessened by Draghi. He can drop a bomb in anywhere

Sometimes it's very difficult to do these posts and keep it fairly simple and easy to read. There's so many variables it's virtually impossible to cover every one and have the post make sense rather than confuse further. At the very least the best advice I can give is to pick some levels you would be happy to trade on a wider view, rather than close by. Watch the show and if you get a trade, great, and if not, you've saved your powder for another day.

Good luck to you all.