It is the EURUSDs day to take center stage as the ECB and Mario Draghi. If you haven’t read the preview from Ryan “ECB meeting preview: Will Mario Draghi wish us a merry Christmas and a happy QE?“, you should. The link is there. Read it.

At the last press conference, these were some of the headlines:

Bloomberg headlines from last press conference

Bloomberg headlines from last press conference

The comments that Draghi said ECB was “unanimous in commitment to act again if needed“, and than that he “sees indications for downward revisions to forecasts“. So what is “needed”? Is it enough to have downward revisions to forecasts? After all, if forecasts are going down, not up at this point, what more do you need? Of course, the answer can be anything, but Mr. Draghi may have been arguing these points at the meeting this week.

The EURUSD is at the lows, but it wasn’t until yesterday that the price moved below the levels from that last press conference on November 6th (it moved down to a low at 1.2363 on the day and 1.2357 the next day. That was the low for year until yesterday and today. So over the last month, the market has done it’s correction. The final step is to get the go ahead to keep what was started going.

Technically, the levels talked about by Ryan make sense to me. Here are my charts and levels for a bull or bear move today.

The EURUSD in November spent the entire month above the low reached just after the last ECB meeting.

The EURUSD in November spent the entire month above the low reached just after the last ECB meeting.

The pair will go down if the comments lay the pipe for something more definitive for next months meeting (will be on January 22nd next month)

  1. 1.2254: This is the trend line on connecting the most recent lows on the daily chart above.
  2. 1.2222: This is the trend line on the weekly chart below. (circle 2 in chart below)
  3. 1.2131: This is the 50% of the move up from the EURUSD all time post-1999 introduction low (from 2000 – marked 3)
  4. 1.2008; OK let’s call it 1.2000. This is the low lower trend line connecting 2005 and 2010 lows and the natural support (circle 4)
  5. 1.2041: 2012 low (circle 5)
  6. 1.1876: Post crisis low print (when Greece was collapsing – circle 6))
  7. 1.1743: The introductory price of the EURUSD going back to January 1999 (circle 7)
Target levels on the downside.

Target levels on the downside.

Needless to say, these will not be hit today (some may) but would be the roadmap with a push in that direction today.

On the topside, most (including Ryan) probably think that rallies are made to be sold. What are the steps higher that might give clues for further upside momentum/or levels to lean against to sell.

  1. 1.2329. This was the low from 2008 (see weekly chart). This is the minimum to get and stay above.
  2. 1.2357: The low for November reached the day after the last ECB meeting. A move above this level puts us back in at the bottom of the non-trend up and down range from November)
  3. 1.2375: The 38.2% of the move down from Monday’s high (see 3 circle in chart below)
  4. 1.2400: This is the 50% and the 100 hour MA. It is also near lows from November 11, November 14 and the underside of the broken trend line. This is a starred level for a ceiling today. The price should not go above if the sellers are to remain in control.(see circle 4 in chart below)
  5. 1.2430: 200 hour MA (green line in the chart below)

Good luck with your trading

The steps higher on a more hawkish/less dovish Draghi

The steps higher on a more “hawkish”/less dovish Draghi