Seriously… What just happened? Just got out of bed and saw this…
ECB cut the interest rate from 0,05% to 0% and sometime later they announced that they will be buying 80B EUR per month instead of 60B and they also going to buy other financial products such as company loans.
The rate cut was unexpected.
The rate cut is not what made the upwards movement. a rate cutshould trigger a downwards movement as it did a hour before.
The raly is mostly because of 2 reasons
Negative interest rates for bank deposits at ECB for banks got put to -0,4% meaning banks have to pay money to hold money on ECB. meaning government bonds will rockbottom the next few months. meaning mortgage applications should increase in next few months a lot. meaning much more money beeing poured out in the system. meaning inflation of EURO should rise a lot. meaning a lot of things which should usually push the euro down… but they didnt. = the true point here is that the big investors and institutions see the last move of Draghi as blasting out the last bit of ammunition to start a inflation towards the desired 2%. It all sounds nice etc but the thoughts behind it are: if it doesnt function… what else? theres not much ammunition left in the portfolio of the ECB to boost things, next steps arent even panned and to be honest noone knows what the next steps could be.
negative news triggering a rally… complete botom has been reached for EUR/USD when you ask me. Paritaet with USD (1:1) is simply not possible.
And to be honest, at the moment simply noone knows what exactly is going on. its panic acting thats been seen on the exchanges in europe. my actions in this situation: simply stay the fuq out till it calms down a bit.
at least from my point of view.
Again proof that fundamentals and news are not my strongest points… I stick to technical analysis. News just make me question what to trade. Ignorance is a bliss.
Bed? You’re a forex trader now, you’re not allowed to go to bed
Think I’ll leave the markets for finish their spin cycle before trading. I am so glad I closed out my short when I did. Really did not expect that kind of reversal.
I plan on leaving the EUR pairs for a week or so to allow them to straighten out and figure out where it’s heading. GBP pairs seem much more viable at the moment.
Euribor rates are down and normal correlation
would have the Euro follow but it has not broken
below 1.05 for an entire YEAR…
I agree with Plork…“What the fook”, indeed…
Glad I’m not the only one think…WOW ! What Move ! I snapped up 30 pips off the retracement but got scared of a quick reversal and got out. So now what ? In the short term are you guys bearish or bullish ?
I have been a Euro bear, Handyman, since mid-2015, and it has got me absolutely nowhere; however, I am still
i do whatever my EA decides
In this video, Chief Currency Strategist John Kicklighter (DailyFX) looks at ‘The End of Monetary Policy’, taking ECB, BoJ, and Fed as examples of how central banks’ influence on the market is now fading.
I wish I could take a stance on it right now, but I think the smart thing is to stay with my system and wait for the technical to tell me bear or bull. I’m going to be diving into some fundamentals this weekend and maybe come out Monday with a direction.