EUR/USD reacted very poorly to the Federal Reserve's announcement during the Wednesday session. This is because there was a certain segment of the population out there that believed the Fed was about to enter some type of quantitative easing. As a became increasingly obvious that the Federal Reserve had no interest in doing this, the market covered a lot of short bets against the US dollar, resulting in this pair falling.
Now we have an interesting set up for today, as the European Central Bank has a meeting and more importantly an announcement after the fact. The head of the ECB, Mario Draghi, has already promised something substantial to the marketplace, and if he doesn't deliver we could see a real mess.
Going forward, the session today should see some type of announcement. The question is what the reaction will be of course, and I suspect that it's going to be negative no matter what happens. The main reason I say this is that the ECB will either disappoint, and this of course will have people running out of Europe as usual, or it could possibly do something substantial. While one would think that the substantial action would be good for the Euro overall, the truth is that anything substantial will more than likely weaken the value of the Euro over time.
Sell the Euro
Matter what happens, I feel that I will be selling the euro again very soon. If we do get a positive reaction to the announcement, I am looking for the first sign of weakness on the hourly chart from which to sell. The reason I say this is that you can clearly see there is a lot of noise between here and 1.27. Certainly, there is an area somewhere over the next 500 pips that will cause some type of resistive reaction. Most of them are based that handles, and as such it won't surprise me to see some type of hourly shooting star at a round number.
Alternately, I will sell a negative reaction to whatever comes out of the ECB as well. I feel that the ECB is in a lose-lose type of situation at the moment as far as the value of its currency. Truth be known now, they have absolutely no interest in seeing a higher valued Euro anyways. I figure I might as will do my part and sell the currency for them.