Talking Points:

- EURUSD range to watch: 1.3585-1.3645.

- EURJPY needs to clear 139.95 before longs can truly reengage.

- USDCHF might be best longer-term opportunity if ECB delivers.

The day of the much-ballyhooed European Central Bank meeting has arrived, one for which market participants have honed in for the past month ever since ECB President Mario Draghi precommitted to a policy shift.

Indeed, with traders focused on the idea that the Governing Council felt "comfortable" with acting in June, the past month has been nothing short of theory being put to practice: a major central bank is threatening to loosen policy further, and in the interim, its currency has depreciated while bonds and equities have both rallied.

Whereas market participants were previously complacent and really not doing much of anything, there are signs that a big move could be around the corner. 1M EURUSD vol eclipsed its 200-DMA for only the second time this year yesterday, and 1W EURUSD implied vol reached its highest level since August 2013. Traders are nervous, but as you can easily see by the EURUSD's tight 60-pip range the past week, no one is ready to commit to a move in either direction just yet.

The ECB's options are wide-ranging and plentiful, beyond the standard refinancing rate cut: a deposit rate cut into negative territory to try and spur lending (would impact around €100B; enhanced forward guidance with promise for future action; and liquidity measures aimed at helping small- and medium-sized enterprises (similar to the Bank of England's FLS).

See the video above for details on trade setups in EURUSD, EURJPY, and USDCHF (a proxy trade). I'll be talking about all of these potential policy changes and their impact on the Euro and other currencies today for live coverage of the ECB rate decision, starting at 11:30 GMT in the DailyFX Live Trading Room.

Read more: GBP/USD Hammers as MACD Cross Develops, GBP/JPY Tests Range Top

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