The European Central Bank (ECB) concluded its scheduled meeting on Thursday (12/9), and voted to maintain its minimum bid rate at virtually 0% but did restructure its bond purchase program. Here's an excerpt from Reuters:Bond yields rose and the euro dipped on Thursday after the European Central Bank said it would prolong its bond purchase program but surprised investors by scaling back on how much it will spend each month. Wall Street stocks closed higher.The euro saw its biggest one-day percentage drop against the dollar since June after the ECB said it would reduce its bond buying program to 60 billion euros a month from 80 billion, but extended it from April to December 2017.ECB President Mario Draghi said it was not an outright winding-down of quantitative easing (QE) but this did not completely reassure fixed income investors."Currencies are reacting more to the extension and bonds are focused on the taper," said Frances Donald, senior economist at Manulife Asset Management in Boston. "The total announcement today is more easing than expected. It may take more time for the bond market to recognize that." (Full Article on Reuters.com)So, the stimulus program was reduced by 20B euros, but extended by 8 months, which means the program will end in 12 months instead of 4. 4*80B euros (original structure) < 12*60B euros (after the change)The market is thus not surprisingly focused on the fact that the ECB is extending the stimulus, though making it a smaller effort each month. This dovish interpretation is pressuring the euro, and the EUR/USD fell sharply.EUR/USD Daily Chart 12/9(click to enlarge)1.0850 Held, Bears Still in Charge:- In the previous update on EUR/USD, I noted that from the critical support around 1.05, EUR/USD had upside first to the 1.0850 pivot. - There were more upside risk, but the market stopped EUR/USD here as the ECB announced its new stimulus structure. - The bearish structure of price action since May remains intact, with price holding under the moving averages, which reflects a bearish mode. The RSI has been holding under 60, which reflects bearish momentum. Critical Support:- Looking at the monthly chart, we can see that 1.0450-1.05 represents a critical consolidation support. - The market was bearish heading into this consolidation range, so I would anticipate a bearish breakout. - If price indeed breaks below 1.0450, EUR/USD would be the lowest it has been since since the start of 2003.- The breakout would open up parity - 1.00. But, we should also note that there is a support/resistance pivot around 1.10, where we might expect some buying. EUR/USD Monthly Chart 12/9(click to enlarge)