The last 2 weeks have witness some crazy moves in the Forex market. The Swiss National Bank (SNB) started the ball rolling but releasing its peg of the EURCHF. This decision rocked the financial industry and caused ripples which also affected brokers. Alpari, a UK broker declared bankruptcy and it is in a midst to find a buyer. FXCM a listed broker in the NYSE almost followed Alpari’s foot step. I do not think we would be witnessing such a move for the next 20 years again. I was lucky to catch the selloff. I sold usdchf and broke my personal record. Most pips captured in 5 minutes. I don’t think it will happen again. 1244 pips in less than 5 minutes.
So you have the biggest buyer of the Euro, SNB giving up on the Euro and the very next week we would have Draghi announcing if ECB would be introducing a stimulus program for the Euro region. The Euro alarms could not sound even louder…Bee Boo…Bee Boo…Mayday…! SNB has already given a hint on the ECB announcement results . I was watching the announcement live and was able to sell the Eurusd at 1.1562. A nice 300 plus pips profit at the moment.
Which comes to the main gist of this article. Would the eurusd continue to trend down and USDX which is closely tied to the euro continue to trend up? Would Abenomics continue to weaken the Yen?
The Fed not only an introduction of stimulus but blew way beyond the figures of Bloomberg survey of at least 550 billion Euro of bond buying. The European Central Bank launched an expanded asset purchase program of 60 billion euro a month that will last from March 2015 until September 2016. A total of 1.1 Trilion Euro. That is about 60 billion euro a month. To add to that, Draghi announced that ECB will add more if its not enough. That’s an open ended QE… From the chart, you can see that we do not see any visible support for the eurusd until 1.0844 and if that is broken the 1.0852 area. Whatever it is, I would be selling the EURUSD at any established resistance area.
The USDX managed to close above 92.63 and currently is trading near resistance of 95.64. The close above is a sign that USDX has a strong potential to go up much further to the next resistance of round number 100 or 101.21. The mandate is to buy the USDX at any established support.
Ever since USDJPY hit 120.00, price has found a resistance area. Currently price is trading in a tight triangle which means only one thing. Something is brewing and price is going to move in a big way soon. Nearest support on the down side is 114.42 and the upside is 122.57. Wait for price to break the trend lines before deciding the direction.