ECB DRAGHI & BOE FORBES SPEECH HIGHLIGHTS - EURGBP GBPUSD EURUSDECB DRAGHI:
-ECB'S DRAGHI SAYS OVERBANKING A FACTOR IN LOW LEVEL OF BANK PROFITABILITY
-ECB'S DRAGHI SAYS OVERCAPACITY MEANS SECTOR IS NOT EFFICIENT
-ECB'S DRAGHI SAYS LIFE INSURERS FACE WEAK PROFITABILITY UNLESS THEY REFORM BUSINESS MODELS
-ECB'S DRAGHI SAYS MARGIN AND HAIRCUT REQUIREMENTS COULD IMPROVE FINANCIAL STABILITY
BOE'S FORBES: NOT YET CONVINCED THAT ADDITIONAL MONETARY EASING WILL BE NECESSARY
-Did not support asset purchases as felt costs were greater than benefits
-Now QE announced, will not be voting against it each month, barring substantial economic change
-Behaviour of consumers and businesses, and evolution of prices is critically important in determining the appropriate action
-Initial effect on the economy of the referendum has been less stormy than many expected
-Some evidence that companies are delaying major investments; commercial property and housing market are weaker
-Consumer spending is strong and net exports are poised to pick up
-Aggregate impact of all of these forces appears to be a modest slowing in the economy to date
Draghi
ECB DRAGHI & BOE FORBES SPEECH HIGHLIGHTS - EURGBP GBPUSD EURUSDECB DRAGHI:
-ECB'S DRAGHI SAYS OVERBANKING A FACTOR IN LOW LEVEL OF BANK PROFITABILITY
-ECB'S DRAGHI SAYS OVERCAPACITY MEANS SECTOR IS NOT EFFICIENT
-ECB'S DRAGHI SAYS LIFE INSURERS FACE WEAK PROFITABILITY UNLESS THEY REFORM BUSINESS MODELS
-ECB'S DRAGHI SAYS MARGIN AND HAIRCUT REQUIREMENTS COULD IMPROVE FINANCIAL STABILITY
BOE'S FORBES: NOT YET CONVINCED THAT ADDITIONAL MONETARY EASING WILL BE NECESSARY
-Did not support asset purchases as felt costs were greater than benefits
-Now QE announced, will not be voting against it each month, barring substantial economic change
-Behaviour of consumers and businesses, and evolution of prices is critically important in determining the appropriate action
-Initial effect on the economy of the referendum has been less stormy than many expected
-Some evidence that companies are delaying major investments; commercial property and housing market are weaker
-Consumer spending is strong and net exports are poised to pick up
-Aggregate impact of all of these forces appears to be a modest slowing in the economy to date
EURUSD: IT'S ALL IN THE CHART - 1.10 AVG TO CONTINUE IN MED-RUN?EUR$:
1. The Greece Debt crisis induced an agGressive 3000pip+ sell-off in just 6m (-22%). As the crisis "resolved" EUR$ however failed to retrace any of its losses.
- Instead EUR$ looked to adopt these new crisis lows as what has become a long-run trading range - the likely explanation would be that future FED/ ECB monpol divergence was priced "early", hence we have maintained the crissi lows.
2. Going forward this explains why EUR$ hasnt made more downside declines from 1.10 despite added Fed tightening and ECB easing - and could imply that we will remain tightly rangebound here (1.05-1.15) as future ECB/ FED monpol divergence is likely to taper off as ECB easing comes to an end, which will potentially off-set the inevitable added FED hikes.
3. Though my bias would still be lower from EUR$ as Fed hikes, and the steepness of their hike cycle is likely to become more aggressive, whereas the ECB easing fade off-set is arguably less of a bullish factor than hikes are a bearish factor.
- HOWEVER, once again it is uncertain how much forward ECB/ FED monpol pricing has been done already in this 3000pip move lower, it could be that until fed funds reaches 2% (for example) that the divergence isnt enough to justify more than the 3000pip move lower that we have seen. It may take a much more aggressive steepening in monpol divergence between ECB/ FED (than what has been generally expected) to drive EUR$ to parity, the extent to which I do not know..
- Also the ECBs easing cycle, and whether it comes to the end (or is extended further) may possibly play a big role on the degree that this 1.10 equilibrium holds. ECB adding QE another 6m out to march 2017 and 240bn would only weigh in the bears favour, though once again the effect may be muted somewhat due to the above.
Any questions or other ideas please comment below!
SELL EUR V AUD, USD, NZD: ECB MONETARY POLICY MINUTES HIGHLIGHTSAfter 5days higher EUR$ Statistically is a 80th percentile sell opportunity - the monetary policy minutes were dovish on the margin reiterating and stressing the ECB's willingness to "Boost stimulus again if needed". This should put downside pressure on EUR given september meeting is coming up (when most likely to add to easing).
EURAUD and EURUSD shorts here look technically the best and fundamentally with EURNZD also possible and an alternative for EURAUD (depends on your preference - higher differential = NZD; weaker monpol fwd guidance/ future rate stability = AUD).
ECB Monetary Policy Minutes Highlights:
ECB SAYS "WIDE AGREEMENT" AMONG COUNCIL MEMBERS NOT TO DISCUSS ANY MONETARY POLICY REACTION AT JULY 20-21 MEETING
-Brexit Vote Created New Headwinds for Eurozone Economy, Heightened Uncertainty-ECB Minutes
-Brexit Vote Could Affect Global Economy in Unpredictable Ways-ECB Minutes
-Policymakers Stressed ECB's Readiness to Boost Stimulus Again if Needed-ECB Minutes
-Policymakers Thought it Was Too Soon to Discuss Fresh Stimulus-ECB Minutes
-ECB Saw Market Impact of Brexit Vote "Contained"-ECB Minutes
-Policymakers Stressed Need To Safeguard Transmission of ECB Policies Through Banks-ECB Minutes
-Policymakers Noted Apparent Link Between Bank Stock Prices, Bank Lending Volumes-ECB Minutes
ECB ACCOUNT OF MONPOL MEETING
-Called For Measures To Address Weak Profitability
-No Clear Upward Trend In Inflation Path
-Premature To Discuss Fresh Stimulus
ECB'S PRAET: CALLS WEAK PRICES AN 'ONGOING SOURCE' OF CONCERN
Three is the magic number. SP1! SPX Futures turning overFutures didn't get any higher after US Close. I am looking for a big short soon. Miight see a few bounces between this latest channel.
Rate Hike off the table, UK Out of Europe. Severe capitulation in most FX pairs - Down down 600 points.
This could be bad over the next week, maybe even sooner if some big bombshells get dropped.
EURUSD: MORE DOWNSIDE?Hi Trader,
We have a 2618 setup forming here on EURUSD in the context of the longer term downtrend. I am particularly confident in this setup for a number of reasons. The early-week rally has been almost completely eliminated with yesterday's selloff. A valid 2618 setup has formed with the double top and close below neckline, confirming the potential for an upcoming move to the downside.
The reversal zone comes in at previous structure, as shown on the chart with the blue circles and arrows. It also happens to line up well with the Fibonacci retracement from the highs at 1.13870.
BE AWARE that the ECB Press Conference and Interest Rate decision is imminent in 4 hours. Price action is likely to be volatile around this event. Just something to be aware of if you are trading Euro tonight, don't get caught with your pants down!
Entry: 1.13480
Stop:1.14020
Target 1: 1.12880
Target 2: 1.12610
Best of luck for the rest of the week and beyond,
Luke
Downside Risk Potential For The EuroThere is downside risk for the euro as price action for EURUSD failed to close above 1.1342, essentially creating an asymmetric double top with the fizzled mid-February rally.
The pair looks to fade back to the 200-day EMA near 1.1108. The rally in the dollar following its steep declines last week could cause a more pronounced slide as long as the DXY remains supported (92.50 remains a key near-term support level).
Next, traders are saw bunds bid while the U.S. 10Y remained rather muted, causing spreads to become the widest since last December.
The U.S. 10Y has held a relatively strong negative correlation with the dollar index going back to last August. If the dollar remains supported, there will likely be dampened demand for U.S. paper outside of any significant headline risk that could spark demand.
If price action does not confirm a downtrend break above 1.1342, the euro will likely slide against the dollar and challenge the minor uptrend created in December.
S/R levels remain key targets for advancement and pullbacks.
Check my posts out at:
bullion.directory
www.investing.com
www.teachingcurrencytrading.com
oilpro.com
EURUSD easy money policy reversal trade beginning to failThe EURUSD strength after the FOMC sounded less hawkish is running out of steam. The consolidation of EURUSD in the first week of April shows the market has digested this new policy line from the Fed - consolidation above recent highs.
The future direction now depends on who moves next? France and Italy are showing weakness in consumption and that is too significant for Draghi to ignore. He has set a precedent of trying to weaken the Euro at each opportunity. To not continue this easy money policy in the face of continued GDP risk will surprise the market and send the Euro much higher given the recent easy talk from the Fed.
Therefore I expect the ECB to give a strong message they are still willing to do everything to bring keep the currency low.
If the EURUSD breaks 1.134 tomorrow then I am looking for a 1.122 target.
1st analysis for the new Financial Year ahead!!Hi All !!!
As you know (if we have spoken) I am about to start my new trading year. ready to (hopefully) achieve my targets of 25% profits per month (although this may not always happens!)
consistency and discipline is important in trading and even more if you are a home trader with a small capital. But Punctuality is even more important!! be there where you have to be in time means that you wont miss opportunities.
and to be punctual you need to have done your homework! which is precisely what I have done this weekend (3 days before new year starts!!! yayy)
Now is time to plan out for the new year so the 1st analysis is ready and although I am a bit rusty! (been only following news quite far...) I am pretty happy with this one.
so... we have a more or less clear up trending channel and the idea is to trade it until it breaks. Simple!
I will be watching for reversal candles within the top and bottom of this channel, I will also be watching for ruptures of this channel and how strong this happens.
so, stay with me (if you want!) and lets discuss the picture of the #EURUSD $EURUSD over the next year!
BUY EURUSD Good afternoon dear colleagues, investors and traders.
Your attention is given fundamentally - technical analysis of the currency pair: EURUSD.
"Mario Draghi - a volley of all weapons, sorry for that purpose by"
Last week Mario Draghi announced a comprehensive stimulus that should lead to a weakening of the single currency, as well as to an increase in inflation.
- Reduced refinancing rate to 0%.
- Increasing incentives on E. 20 billion.
- Reduction of the deposit rate to - 0.40%.
- Heightening tool purchases in QE.
- Valid TLTROII program.
These actions were predicted by us 28.02.2015
(Https://vk.com/wermelgion?w=wall-73415082_1811/all)
The first 3 steps lead to increased risks in the bond market and the creation of it, "Liquidity Risk" (uvelechenie Prize for it).
But the fourth measure gives life to financial instruments and banks to refinance their obligations under other long-term loans from the ECB at 0%.
QE program is not able to cause inflation to rise, even on the horizon of 3 - 4 years.
TLTRO - 4 summer program of cheap loans to banks, inflation is not dispersed, as all loans that banks get forwarded to the financial markets.
Reduced refinancing rate - lowers interest rates on the bonds: for example Germany's bonds:
2 - year - 0.46%
5 - year - 0.25%
10 - year: 0.31%
ECB actions will not lead to higher inflation and tools using the ECB is only stimulatory DCT.
As these actions are reflected in the German bond market:
Germany Sovereign Bond Index (index of sovereign bonds)
- Moved into negative territory before: -0.6%
Investment Grade European Corporate Bond Index (investment grade corporate bond index)
- Significantly increased up to: 4.91%
The graphs you can see from this link:
www.bloomberg.com ..
For the single currency, this means only one thing: the ECB plans to lower interest rates by increasing the money supply, as well as to spur business and consumption by providing cheap credits. However, this does not happen. We see a great example of the Fed, and perhaps it will spur job growth, but in order that it would stimulate inflation need a certain time after the unemployment rate closer to the conditions of full employment.
We continue to be bullish on the single currency is already causing 3 factors:
1) Basic fundamentals are at a height of:
• The dynamics of balance of payments 25 V.
• The dynamics of the trade balance 22 B.
As well as the previous data on the inflow of portfolio investments also provide the physical demand for the single European currency.
2) Technical Analysis:
Probable upward trend in more detail below.
3) Mooving average: 200 and 300 day moving averages crossed again, showing the change in trend in the short term.
We maintain our buy from:
1.0861
1.0932
1.1027
Also, we are opening a new deal:
#Buy EURUSD:
- Price: 1.1100 - 1.1110
#TP: 1.14
#SL: Not provided.
- Volume: 0.10% of the deposit.
••Technical analysis :
Well visible on the daily timeframe, the pair is in the uplink. In a more global sense in the pair has been observed for quite a long consolidation. Couple holding steady above the important support level of 1.08. The primary objective for the pair is the mark of 1.14, after its breakthrough is expected in the second goal of 1.20.
The CFTC has not yet had time to get data on the ECB: - the amount of net Short Euro looks small.
•• iWM levels: (Weekly)
Pivot price: 1.1061
If the price is above the H4 timeframe, then we recommend the purchase with the objectives of: 1.1300, 1.1465, 1.1695
If the price is below the H4 timeframe, then we recommend the sale with the objectives of: 1.0905, 1.0663
•• iWM levels: (Monthly)
Pivot price: 1.1023
If the price is higher in the D1 timeframe, then we recommend the purchase with the objectives of: 1.1227, 1.1582, 1.1789.
If the price is lower than on the D1 timeframe, then we recommend the sale with the objectives of: 1.0666, 1.0459, 1.0110.
wermelgion@gmail.com
EUR/USD ahead of ECB policy meeting tomorrowThe EUR/USD has hit the 38.2% fib retracement and is forming doji candlestick patterns which hints a possible move downwards. If Quantitative easing is increased tomorrow then we expect the Euro to fall and Vice versa. See www.plusfxtrading.com for more in depth analysis.
EURJPY Intraday TechnicalsThe yen has severely weakened during the Asian session as the Nikkei tries to play catch up with the large, volumeless pullback continuation in SPX.
Intraday technicals are indicating that the pair is at a tipping point. A break of the minor downward trend line would signal further continuation, potentially to 125.10 (pending clearance from the 72-4H EMA).
Although, the pair may remain volatile. If the euro continues to ease south on expectations that the European Central Bank will further ease, and risk sentiment wanes, the pair could trend lower.
However, if traders continues to push risk assets higher, subsequently crushing the yen, even further euro weakness may not stop more upward pressure.
A divergence in price action and the relative strength index could be signaling price turnover.
Please feel free to comment and share charts! And follow me @Lemieux_26
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EURCHF At Key Technical Level Prior to ECB MeetingThe Swiss franc has seen some action as traders move in and out of safe-haven assets, no matter what the Swiss National Bank implements (franc futures has a .82 correlation with gold).
With the ECB hinting that more quantitative easing is possible ahead of the rate decision March 10, the SNB may feel obliged to intervene to stop any significant appreciation in the franc. Thomas Jordan, Governor of the SNB, has said that negative interest rates have their limit; so, probable line if action would be a direct FX intervention.
Traders are not pricing in any significant change in monetary policy from the ECB, so that may cause the EURCHF to rebound from its oversold, intraday position.
Price action is stagnating within a demand zone, and minor upside potential to 1.0935 and 1.0960 is seen leading into March. However, I don't foresee the SNB doing anything drastic (which may be highly dependent on the lengths the ECB is willing to go).
I expect future near-term CHF strength, causing price action to test the bottom of the demand zone. If this breaks, expect the pair to trade lower to 1.0860.
If the risk environment worsens, gold could trigger more safe-haven demand pushing EURCHF to 1.0830.
Please feel free to comment and share charts! And follow me @Lemieux_26
Check my posts out at:
bullion.directory
www.investing.com
www.teachingcurrencytrading.com
oilpro.com
Update status