Homiya

ECB cut rates Started QE and Started Bond Buying

FX:EURUSD   Euro Fx/U.S. Dollar
149 2 6
Problem - EU inflation low how to increase inflation?

“A bit of inflation can grow the economy”- Inflation Target 2.0% suggested by most of the Central Bankers..

USA inflation rate 1.4% Interest Rates 0.5% Unemployment 4.9%

“A bit of inflation can grow the economy”- Inflation Target 2.0% suggested by most of the Central Bankers..

EU inflation Rate -0.2%
Interest Rates 0.05%
Unemployment 10.3%
as at 2016.03.09

Data from tradingeconomics.com



Solution

ECB can cut rate (0.05%) to lower or negative rates in order to raise inflation a bit..
They can start QE            
They can start bond buying


Impact

If they cut more people not be willing to save instead they will spend or move money out of country..

Promote/Not promote Exports (Mixed solutions can make whipsaws in the market)

Lending Rates reduce more people will borrow and the mid term recovery for EUR

If they start Quantity more the money supply in the economy so that people will have more money in hand mid term recovery for EUR



Conclusion

I’m expecting a neutral view for EUR as long as ECB will be willing to cut rates..start QE             and start buying bonds

1.1368 being the 1st resistance area

1.1982 being 2nd resistance area

1.24496 being 3rd support area.



1.06319 being the 1st support area

1.0344 being the 2st support area

0.8754 being the 3rd support area



Questions in mind !!

USA inflation 1.4% Interest Rates 0.5%, when they reach 2.0 % will FED intervene to raise rates?

China inflation 2.3% Interest Rates 4.35%, How will they react? Will Yuan be promoted a global foreign reserve currency ?

See the story @ https://forexideasblog.wordpress.com/2016/03/10/ecb-will-they-cut/
D-Rod
9 months ago
nice stuff
Chicken Soup from ECB & turbulence next week..
i hope u find the 16 hour timeframe to a better timeframe than the choppy daily chart
Reply
Homiya D-Rod
9 months ago
Thanks Mate.. Will be looking into that.. Learning how fundamentals works adds more meaning to a chart.. and also helps to chose which pair to trade .. You got it all .. Thanks
Reply
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