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22 Jan 2015
ECB gives plans to launch sovereign QE in March - FXStreet
FXStreet (Guatemala) - Valeria Bednarik, chief analyst at FXStreet explained that the ECB has finally launched sovereign quantitative easing, in the way of purchases of EUR 60 billion a month beginning in March 2015 until September 2016, of national bonds and agency bonds.
Key Quotes:
"The package of over EUR 1T was largely above what market had priced in, but not a surprise after SNB’s move last Thursday, when it decided to lift the EUR/CHF peg. The program is open-ended as according to Draghi, it’s ‘intended to be carried out until end-September 2016 and will in any case be conducted until we see a sustained adjustment in the path of inflation.'"
"The EUR/USD swung in a 120 pips with the news, but as the press conference faded the EUR capitulate against its rivals, falling as low as 1.1362 against the greenback."
"Technically, it has accomplished a long term target, as per reaching 1.1370 static support area, where the pair presents several weekly and daily lows back from 2003, so some consolidation at current levels and even a limited bounce, should not be surprise. Short term, the pair is extremely oversold according to technical indicators and with RSI at 18 which supports some upward correction in the near term."
"In the 4 hours chart indicators maintain a strong upward momentum, not yet ready to turn higher. Nevertheless, this ECB move has somehow reaffirmed the dominant bearish trend, and despite USD longs may be overcrowded, the pair is now set to reach the key psychological figure of 1.10 in the upcoming weeks."
Key Quotes:
"The package of over EUR 1T was largely above what market had priced in, but not a surprise after SNB’s move last Thursday, when it decided to lift the EUR/CHF peg. The program is open-ended as according to Draghi, it’s ‘intended to be carried out until end-September 2016 and will in any case be conducted until we see a sustained adjustment in the path of inflation.'"
"The EUR/USD swung in a 120 pips with the news, but as the press conference faded the EUR capitulate against its rivals, falling as low as 1.1362 against the greenback."
"Technically, it has accomplished a long term target, as per reaching 1.1370 static support area, where the pair presents several weekly and daily lows back from 2003, so some consolidation at current levels and even a limited bounce, should not be surprise. Short term, the pair is extremely oversold according to technical indicators and with RSI at 18 which supports some upward correction in the near term."
"In the 4 hours chart indicators maintain a strong upward momentum, not yet ready to turn higher. Nevertheless, this ECB move has somehow reaffirmed the dominant bearish trend, and despite USD longs may be overcrowded, the pair is now set to reach the key psychological figure of 1.10 in the upcoming weeks."