ECB rules..... (Update1)

Good morning friends, its Thursday already and almost nearing the end of the 2nd week of 2013 which leaves us with 50 more weeks to go for the year.

E$ fell to an intraday low of 1.30366 taking out stops below 1.3040 before suspected sovereign demand caused a short-squeeze back to around 1.3055. Another bout of buying from a US investment name took it  to 1.3080 just ahead of Ldn close. However, gains were not sustainable and E$ fell back to around 1.306ish to close the trading day. Guess market is quite mixed on their take on the outcome of the ECB rate announcement/conference at 2045/2130hrs (Sin/HK).

Though E$ fell to my target level for profit taking (1.3040-20), the price action was more of a grind rather than an impulsive move that I was expecting. As a result of this information, it is apparent that E$ may not be ready to move much lower before it moves higher first. This bring to mind Scenario 2 that was outlined in "Step by step" (8 Jan 13, Tue).

Order book information from Ldn session yesterday (outdated) is as follows:
Stop loss: 1.3150/60 and 1.3200
Limit: 1.3010/00, 1.3140/50 and 1.3190

Technically, shorter intraday indicator is at o/s level with momentum turning from down to consolidation, which at current level would imply upside bias. This goes in line with the longer intraday chart pattern (circled). Pre-announcement, I would expect trading range to be confined to 1.3030/40 to 1.3080/90. Post announcement, I will not be surprised to see Tuesday's high of 1.3140 being challenged in the next 48hrs. Admittedly, at this juncture, I am leaning towards a firmer E$ towards 1.32ish first before lower again.

Update1:
EURUSD
In view of a major risk event this evening, I feel a need to cover a bit more grounds as one has to be better prepared mentally for various scenarios:
E$ friendly scenario:
Very likely to hold 1.3010/30 for a rally to challenge 1.3140.
E$ unfriendly scenario:
Possible move into expanded lower range of 1.2990/1.3010 but still see a rebound subsequently.

A daily close below 1.2990 is a bearish signal and invalidates the rebound story. It will expose E$ to test 1.2930/40.

E$ 4hourly chart - Short term intraday reversal signal