The ECB held its minimum-bid rate at 0.75%. Draghi put away deflation fears while sounding less hands-on. Less ECB activism could be euro-positive if the market interprets that as less of a chance for stimulus. But it also depends on how the market assesses the European leaders in this period of Euro-zone crisis. The BoE just stated that it's holding off further stimulus for now, but that is a reaction to better Q3 data. The euro-zone remains alive and well.
Let’s take a look at the initial reactions in some EUR-crosses.
EUR/USD: Initial reaction during and after Mario Draghi’s press conference showed a bounce in the euro. The EUR/USD cracked the intra-session low down to 1.2716 but held there. A rally above 1.2755 established a double bottom. The next focus of resistance is at the 1.2780 area. A significant move would be a rally above 1.28, which makes it a failure to confirm recent break of the 1.2750-1.28 support area, and therefore would introduce the bullish outlook.EUR/USD 15-min Chart 11/8/2012 9:48AM EST" width="676" height="474">
EUR/GBP: The Bank of England went first today, and sounded less dovish as the UK is pulling out of its recession. TheMonetary Policy Committee (MPC) held interest rates and the asset purchase program. This strengthened the sterling initially. The EUR/GBP fell, but only to be held above 0.7960 after the ECB’s turn, which brought the EUR/GBP back to thesupport of a previous intra-session range at 0.7975. This range resistance is at 0.7995. A break above 0.80 will clear show that the initial range breakdown was a false move, thereby introducing short-term bullish outlook.EUR/GBP 15-min Chart 11/8/2012 9:50AM EST" width="676" height="473">
EUR/JPY is also rallying after the ECB poress conference, holding an intra-day low at 101.57 and trying to test the 102 handle. A break above 102.20 will clear intra-session range highs and introduce a bullish outlook in the short term.
Fan Yang, CMT, is a forex trader, analyst, educator and Chief Technical Strategist for FXTimes -- provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.
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