Volumetric analysis on January 24


The main intrigue of the week is the actions of the European regulator. Last week, Draghi reported that the quantitative easing program ended at the most inappropriate moment. At a time when global geopolitical and economic risks are coming, and when the question of England’s withdrawal from the European Union is an edge. In addition, the European banks lack liquidity at the moment, and in fact a weaker Euro is more acceptable for the EU. Will Draghi drop the Euro today? If so, it will not be a rapid fall. This will be a decrease in the medium term. Draghi has a lot of leverage for this. The most obvious is the extension of the TLTRO program. This program is designed for issuing cheap loans to commercial banks, so that they, in turn, are more willing to lend to companies and enterprises. In fact, this will provide liquidity to banks and weaken the European currency, since cheap money will appear in circulation. The second way to weaken the Euro is to cancel the probability of an interest rate increase in 2019. True, this probability is most likely already embedded in the price, and there will not be much to wait for a special reduction from these statements.

But do not blindly believe that the regulator will drop the euro. Not necessary. We can hear from Draghi that the ECB sees everything, he has everything under control, that he is ready to take measures, but he will not do it yet. In our opinion, this is even positive for the Euro. At least for a short time. And here we turn to the technical picture. And we draw attention to the fact that the whole week the Euro was under pressure from the sellers and until the price breaks 1.1425, we will not talk about purchases. Obviously, if the breakdown takes place, it will be on the statements of the regulator, but here is the question. And what they will be? 


The Central Bank of Japan yesterday once again confirmed that it will stick to its monetary policy, no matter what happens. Well, their monetary policy is aimed at weakening the national currency, which we have seen since the beginning of this year. The technical picture suggests that the trend for the USDJPY pair is upward, and we assume that if there is an initiative from the buyers, the price will not fall below 109.15, and the visible growth may reach 110.35


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