EURUSD making new session lows. Test trend line.

The EURGBP has been a driving force in trading today. Or is it the EURUSD and the GBPUSD were driving forces in the EURGBP?

In either case, each were at some key levels at their peaks. The EURUSD was once again trying to get and stay above the 200 day MA at the 1.1045 level. The EURGBP was testing the 200 hour MA (and also the 100 bar MA on the 4-hour chart). Earlier today I wrote: "Key level for the EURUSD. Key level for the EURGBP. One will win. Risk is limited."

Well the sellers won. Risk was limited. The price has moved lower in each.

The EURGBP is approaching the 100 hour MA, at the 0.77324 level currently. That should slow the descent. The low has made it to 0.7737.

Meanwhile the EURUSD is testing an upward sloping trend line, which may do the same for it - at least for the time being.

Going forward the ECB decision is on Thursday and they are expected to stimulate in some form or fashion. In December they cut rates but failed to add additional QE. That led to a 400 pip surge to the upside. The EURUSD high on that day extended to 1.0980 not far from the current level (it rose from 1.0518 so it was a huge move). See the daily chart below. In

The 200 day hold today (green line in the chart below) shows the markets apprehension to go too far to the upside before the decision. The high today was also pretty much equal to the post ECB December 2015 high.

So there is a nice ceiling there. On the downside the 100 day MA at 1.0922 - along with an old trend line - are the next key support targets.

The ECB and Draghi has the potential to rip through either of those extremes depending on what they do. That is a gamble to me. So for me, it is just a trade before the Thursday fireworks. As mentioned earlier, my gut is the top is in place. If the price can get below the hourly trend line, the pair may look toward the 50% of the move up from the December low. at 1.09472. After that the 100 day MA. My expectations are that come 7:45 AM ET on Thursday, the price will be sitting between the goal posts defined by the two MAs. Then it will be up to let the ECB/Draghi decide.