The big day for the euro finally arrived, and market participants are hoping that Draghi will put an end to the euro's recent lethargy. The EUR/USD traded recently more or less sideways accompanied by a slight bullish bias, but the lack of direction has not served us well, leading to a chastening performance. As a result, euro traders are tired of investing in a currency which fails to provide sustained moves even if the direction should be clear.
The euro faces a big problem since the European Central Bank failed to impress in December, which resulted in a counter-movement despite more easing and a dovish bias. The market's response to the December announcement creates insecurity and a lack of confidence in the credibility of the single currency. While in December everybody was short, the positioning now appears to be quite different as investors remain risk-averse ahead of the ECB decision. Finally, there is still hope that we will see an appropriate movement after today's crucial announcement, as the bearish scenario is possibly not fully priced in.
The ECB is likely to avoid further appreciation of the euro and could therefore surprise the market with an aggressive move including an extension of its QE program as well as increasing the monthly amount of bond purchases up to 10 or 15 billion euros or even more. While a deposit rate cut of 10 basis points is widely expected and priced in, it would require additional measures and lower inflation forecasts in order to satisfy the market's expectations. ECB president Mario Draghi is therefore confronted by a difficult task and every trader is eager to see whether he will deliver a clear message.
The expectations are very high and anything can happen, so traders should prepare for both scenarios bullish and bearish.
EUR/USD
The euro is currently confined to a range between 1.1060 and 1.09. This may change after today's ECB announcement but will also hinge on Draghi's rhetoric at the press conference. Prices above 1.1070 should attract the attention of euro-bulls, whereas a final break below the crucial support at 1.08 may revive the downtrend in the EUR/USD sending the pair back towards 1.0650. For the time being, our focus still remains on a break below 1.0940 which could result in a slide towards 1.09 and further 1.0860. 
The ECB will announce its rate decision at 12:45 GMT. Draghi will hold a press conference 45 minutes later.
The British pound traded within a narrow range between 1.4240 and 1.4185. We expect a breakout of that trading range in the near-term and focus on prices above 1.4260 for any bullish and on prices below 1.4170 for any bearish engagements.
Here are our daily signal alerts:
EUR/USD
Long at 1.1010 SL 25 TP 30, 100
Short at 1.0935 SL 25 TP 30, 100
GBP/USD
Long at 1.4220 SL 25 TP 25, 80
Short at 1.4166 SL 25 TP 25, 60
We wish you good trades and many pips!
Disclaimer: Any and all liability of the author is excluded.