Forex News Trading Events 19th – 23rd January

I’ve put together some analysis of this week’s Forex news events, which I hope will give everyone a good understanding of how I’m viewing the market for this week.

This week’s “high impact” news event that I will be looking to trade is as follows;

Thursday 22^nd January 2015

EUR – ECB Press conference – 01:30pm

The market is looking to this event with anticipation as there is a strong belief held that the ECB will use this meeting as the vehicle to announce details of their Quantitative easing programme, whether or not they will actually announce QE has taken a backseat in the supposition amongst economists given that as we press forward into 2015 it appears that Mario Draghi’s options are diminishing by the week as data coming from Eurozone member states seems to grow more gloomy by the week.

Basically we’ve reached the point in time which necessitates direct response and action from the central bank and where the ECB decide to go all out and print unlimited amounts of money to get inflation within the Eurozone area back to some semblance of pecuniary health.

This of course is a massive day for the Euro arguably a pivotal day in its history as a currency as we forecast this to be the beginning of its largest descent.

When and if (as the market is brimful of illogical surprises) they announce QE the EUR will dump, it devalue far beyond 115 possibly to 110 with further downside potential to 105 over the next few weeks with the potential of parity by the end of 2015.

This is a significant point in time, with the potential to make hundreds perhaps even thousands of pips if we position ourselves correctly prior to the event therefore for very obvious reasons the trade of the week the trade of the week is selling the Euro surrounding this event.

There is a risk of course however unlikely that the ECB don’t announce QE which given the news flow recently and chatter spreading across the markets seems highly unlikely.

However the risk lies in the details, by that I mean that they do announce QE but it is not quite the programme in terms of size and scope that the market had come to expect, if that does happen we could see a rally on the Euro that would be accredited to relief (relief rally) given how much the currency has devalued in the weeks preceding the event on account of the sheer amount of investor anticipation that has been surrounding this announcement.

If we do get any such rally or see any appreciation on the Euro whatsoever we want to be viewing that as attractive points to get in and start selling into it, particularly against the USD because ultimately the two central banks are heading in opposite directions.

It’s also worth noting what happened last week with the SNB, the SNB removed it’s cap on the EURCHF pair which they had been defending the floor at the 1.20 level, having recently removed that cap we can conjecture that they wouldn’t do that and potentially mar their image of stability unless they had good reason to i.e. they are well aware that the ECB stimulus package is going to be noteworthy and it is going to affect the markets, which would of course make defending the floor from a Swiss point of view very difficult if not neigh on impossible. In addition to the removal of the cap which took headlines and by default the sum of our attention it’s also worth noting that the SNB revised their rates of interest to negative interest which is due to take effect on the 22^nd although they assure us that this is just coincidence.

The post Forex News Trading Events 19th – 23rd January appeared first on Jarratt Davis.

Source:: Forex News Trading Events 19th – 23rd January