Euro runs higher but the danger is far from over
This is the part I've been warning about so what's next
- A cut that met expectations = no reason to sell more euro's and covering has taken place
- The ECB have set us up for further action which is obviously going to be QE related, and or the mechanics of the dep rate cut (tiers and so on)
- The market is now going to be guessing what that means, and now we play the QE expectation game
For QE the expectations are in the general region of a €10-20bn increase. If we're anywhere in the middle we've hit expectations again and are likely to see more short covering.
Outside of this range and we'll get a bigger reaction. Less than €10bn - up we go. More than €20bn, down we go
The key will be if we go down, how far. I suspect that we may struggle to get back to the lows, just on QE news
Of course the main fly is Draghi and whether he will talk the euro back down. If he talks with actions, then he'll win and the euro falls. If he talks about what may happen (If's, and's and maybe's), then he might lose and the euro jumps
Under 30 mins to go, EURUSD is testing 1.0700 and I'm tempted to short
