EUR/USD rose during the session on Thursday as the Federal Reserve announced an expansion of monetary easing via the Mortgage Back Securities market. The additional $40 billion that is going to be spent each month should continue to keep rates extraordinarily allow in the United States. Also, the Fed stated that they were looking at keeping rates extraordinarily low until the end of 2015, and continuing to ease until well after the economy picks back up.
Even though this essentially means inflation in the future, the Euro gained almost immediately. The pair is basically a fight between two central banks that are going to be easing well into the future, and for the moment it appears that the Federal Reserve has "won” the currency war as both central banks wish to see their currencies cheaper.
However, there will come a time when they start to pay attention to the Europeans again. In the short term, I think it is obvious that the Dollar will be in serious trouble. However, this pair isn't as clean cut of a trade as it would be and of their currencies against the US dollar, and as such there are some things to pay attention to.
1.30 still matters
The 1.30 level is very significant in this currency pair as it is the former bottom to a descending triangle that sent this pair so much lower at the beginning of this year. This area should be massively resistive right now, and as such this pair may actually struggle over the next couple hundred pips.
I see a lot of noise until we get the 1.33, and although I think this pair certainly could reach that level, there will be easier ways to play a positive Euro stance. Also, there are still plenty of headline risks in the European Union, and as such this pair will still be extremely volatile.
I think if you want to go long this currency pair, the best bet that you have is to wait for a pullback. I see the 1.28 level was interesting from a long the point of view as it is a cluster of support, and also has the 200 day exponential moving average sitting at it. Regardless, there are going to be easier pairs to trade in the short-term.