ECB Cuts Rates, Expands QE: What this Means for the Euro

FX:EURUSD   欧元/美元
I've felt that the Euro dollar has been overvalued ever since the ECB disappointment in December which sent its value soaring. Even Draghi himself noted that was not his intent. With interest rates lower yet again and QE expanded, where is the end? About 25% of the world's GDP producing countries have introduced negative interest rates and this has been the case for some time in Northern Europe. It seems the 'virus' of negative interest rates is spreading and infecting those clinging by a thread.

Is there any sign of hope for Europe? The massive influx of immigrants (thanks again, Merkel), political instability, Greece concerns (with Portugal and Spain not far behind), and weak inflation do not paint a good picture.

Using technicals, one could have forecasted the decision by noting the bearish head and shoulders pattern, but clearly hindsight is 20/20. Note that this is a 30 min chart. If you check day level granularity you see EURUSD has a lot of room to tumble, with a head and shoulders-ish pattern forming at this level too.

Typically with massive moves like those pictured, we can expect a pause, followed by continuation up until a level drawn by the fibonacci extension , followed by a slow retracement (what I call the sickle pattern). We can expect to see something like this here, but keep in mind there's really no good news coming out of Europe and parity with the dollar seems like an inevitability at this point. I'd wait until the ECB decision frenzy subsides, then short into rallies. You don't want to get caught in a short covering dead cat bounce.
Check out my indicators!
ZH 简体中文
EN English
EN English (UK)
EN English (IN)
DE Deutsch
FR Français
ES Español
IT Italiano
PL Polski
SV Svenska
TR Türkçe
RU Русский
PT Português
ID Bahasa Indonesia
MS Bahasa Melayu
TH ภาษาไทย
VI Tiếng Việt
JA 日本語
KO 한국어
ZH 繁體中文
AR العربية
HE עברית
首页 股票筛选器 外汇筛选器 加密货币筛选器 财经日历 如何运作 图表功能 网站规则 版主 网站 & 经纪商解决方案 插件 图表库 功能请求 博客 & 新闻 常见问题 帮助 & 维基 Twitter
概述 个人资料设置 账号和账单 我的客服工单 联系支持 已发表观点 粉丝 正在关注 私人消息 聊天 退出