The stories have been told. It will be up to the price action.
The stories have been told expertly. Reference:
- ECB meeting preview: It's crunch time for the ECB - Who are the council members involved and what have they been saying?
- Preview: Scenarios in play ahead of today's ECB decision
- It could be a bloodbath in short term European bonds if Draghi fails to deliver
- ECB preview - Draghi will credibly promise to behave irresponsibly
Now the main event and the price action. Is it priced in, is it not. How much is priced in and of course much will depend on what they do. I will simply focus on the levels - above and below - that have some significance.
With the bias more to the downside I will start there:
Downside targets:
- 1.0520: Low from April 13
- 1.0499: Low going all the way back to March 21 2003
- 1.04615 low from March 13
Going from there starts to get more dicey. The market will be looking more toward staying below levels that were broken and below retracements of moves down (like the 38.2-50% of a trend move lower). The phrase will be stay below "this correction level" the bears remain in control. There will also be lower trend lines. So targets and bearish bias will be defined on the fly. Outside of that other levels down the road that are important, include:
- 1.0206: High from July 19, 2002
- 1.0174: Swing high from November 11, 2002
- Then traders will be looking toward the ubiquitous parity level.
On the topside, the market will be focused on those levels that have been support:
- 1.0550: Broken trend line on the hourly chart above
- 1.0565. Low from Nov 25
- 1.0591: 100 hour MA
- 1.0608: 200 hour MA
- 1.0617 Trend line
- 1.0624: 38.2%
- 1.06422: Corrective high from Nov 25
- Then the yellow area (old swing highs and lows at 1.0683-91 area (lets say up to 1.0700)
