The euro bulls are not too strong
22.10.2014
The main currency pair can not fully develop any upward momentum, losing the position under the influence of the nuances of the crisis in the euro zone.
Yesterday the euro/dollar was still not able to realize the growing momentum in full, although it would have looked very nice for the main currency pair to secure above 1.28.
Yesterday the European Central Bank said that it may start buying corporate bonds of individual countries in the region. Until that moment, the ECB bought only government bonds. Probably, we are talking about the debts of companies in Spain, Italy and other countries of the south. If so, then it seriously alters the case for long-term forecast horizons for the euro area over all - if the status of the company requires the intervention of a global regulator, then, the situation is about to get out of control.
The QE program from the ECB has started to work on Monday, 20 of October. But that's not the QE, which we are used to seeing in the context of American incentives – the ECB starts buying mortgage bonds, publishing a report every Monday. It will be interesting to see whose securities were purchased first - most likely for the currency market it will be a new speculative motive.
Overall, the likelihood of sales in the euro/dollar remains high. In the short-term the pair may make another attempt to strengthen, but it will have no effect on the fundamental background.
RoboForex Analytical Department
Yesterday the euro/dollar was still not able to realize the growing momentum in full, although it would have looked very nice for the main currency pair to secure above 1.28.
Yesterday the European Central Bank said that it may start buying corporate bonds of individual countries in the region. Until that moment, the ECB bought only government bonds. Probably, we are talking about the debts of companies in Spain, Italy and other countries of the south. If so, then it seriously alters the case for long-term forecast horizons for the euro area over all - if the status of the company requires the intervention of a global regulator, then, the situation is about to get out of control.
The QE program from the ECB has started to work on Monday, 20 of October. But that's not the QE, which we are used to seeing in the context of American incentives – the ECB starts buying mortgage bonds, publishing a report every Monday. It will be interesting to see whose securities were purchased first - most likely for the currency market it will be a new speculative motive.
Overall, the likelihood of sales in the euro/dollar remains high. In the short-term the pair may make another attempt to strengthen, but it will have no effect on the fundamental background.
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.