The euro is waiting for news
22.01.2015
Today is a very important day: the European Central Bank will make a decision on full stimulation.
The euro is not even nervous: well, why should it be? Potential future monetary decisions of the ECB have generally been included in the basic price of the currency pair. This, however, does not negate the likelihood of sharp emotional reactions in the moment.
"Training" before the main decision has already taken place: yesterday the market "played" through the news of the letter of the ECB head, Mario Draghi to the Executive Board. The document proposes to carry out quantitative easing with an average monthly volume of 50 billion euro over two years - until the end of 2016. Some simple calculations give a total figure of 1.1 trillion euro, and this value "beats" in the understanding of the desired volume of stimulation, and a stable balance in the representation of the ECB. It should be about 3 billion euro in view of future recoveries for LTRO auctions, which the ECB held before.
It seems that in the moment the euro/dollar can go into the region of 1.14 (maybe less?), later the sales will be bought up, and then the main pair will stabilize around 1.15. It all depends on the European Central Bank.
Hopefully, at today's press conference, "Super Mario" do without vague rhetoric and will be extremely precise in the wording and conclusions so that the market will have no doubt in the schemes of the ECB and their potential. Otherwise, the euro is "not to be envied."
RoboForex Analytical Department
The euro is not even nervous: well, why should it be? Potential future monetary decisions of the ECB have generally been included in the basic price of the currency pair. This, however, does not negate the likelihood of sharp emotional reactions in the moment.
"Training" before the main decision has already taken place: yesterday the market "played" through the news of the letter of the ECB head, Mario Draghi to the Executive Board. The document proposes to carry out quantitative easing with an average monthly volume of 50 billion euro over two years - until the end of 2016. Some simple calculations give a total figure of 1.1 trillion euro, and this value "beats" in the understanding of the desired volume of stimulation, and a stable balance in the representation of the ECB. It should be about 3 billion euro in view of future recoveries for LTRO auctions, which the ECB held before.
It seems that in the moment the euro/dollar can go into the region of 1.14 (maybe less?), later the sales will be bought up, and then the main pair will stabilize around 1.15. It all depends on the European Central Bank.
Hopefully, at today's press conference, "Super Mario" do without vague rhetoric and will be extremely precise in the wording and conclusions so that the market will have no doubt in the schemes of the ECB and their potential. Otherwise, the euro is "not to be envied."
RoboForex Analytical Department
Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.