Everyone is looking for a dovish Draghi and ECB, so will they deliver?

I'm keeping a close eye on this pair over the next few sessions as I'm thinking that the big opportunity is for longs not shorts

The market has been crowing about when the ECB will increase QE not if they will and they could be setting themselves up for disappointment

The ECB is facing the same problems that the rest of the world is facing and that's slowing growth. What's different in the US and UK is that domestically things are much better. After 8 months of QE there may have been some green shoots but nothing that you can say is trending considerably higher

Europe still faces low inflation and that's the ECB's number one mandate. Considering that nearly all of it is from oil, QE has no effect there.

Talk is cheap

Would more QE help Europe? That's the big question. If the ECB aren't getting a reaction to these amounts they need to understand why. Just chucking more in won't help. That's going to be one of the key aspects on Thursday and the big mover of the Euro. If they believe that they aren't doing enough then the market will be on the right side of expecting more. If they trot out the transitory guff and that QE still needs time to filter down the channels then the market will be wrong footed

Of course the Draghster may use the opportunity to talk the euro down by repeating that they are ready to do more. That line has been running for a while now and will be losing it's magic power. If the market thinks the ECB is all talk but no action then again, the euro is destined for the upside. The only talk that will count is if Draghi drops a big hint that they're ready to act. The messages from ECB members recently has been that they can move but are still willing to wait. It should also be noted that Germany doesn't vote at this meeting and they have the biggest voice.

So longs is what I'm looking at if we see some decent pre-ECB dips. I can't see them changing the current party line at this meeting, nor signalling any change at the next. That should be positive for euro which has been one a one way slide since last week

Where to get in?

1.1300 is looking a tough nut right now but the pressure on it remains. That means we could get a decent blow through at some point over the next couple of sessions. There's a support line from August that sits at 1.1290/95, the 100 H4 ma just under there at 1.1288 and then the 55 dma at 1.1221

EURUSD daily chart

The 1.1200/20 area is looking like the ideal play to start picking up longs if we go there before the ECB. There's good support down to the 1.1130 and 1.1100 area to add longs. Stop wise, I would look at the break of 1.1080

There's a long way to go to get down to my desired levels so we'll have to see how we do over the next few days