A chance to play the clock over the ECB
As you may know I was with our friends once again at TipTv. During the show I spoke about a trade idea that might be a good play if all the pieces fit
Adam did his usual great job of giving some trading thoughts on different scenarios over the ECB but there could be an angle for a trade to play the clock
We've got the two points of focus, the rates decisions and then QE. Rates are announced first at 12.45 GMT and we won't get any information on QE until the presser. That's a 45 minute window where the market will have moved on rates and will then be waiting for the presser
I see a shorting opportunity IF the ECB don't move on rates. Leaving rates unchanged will see the euro shoot higher initially, and then the indecision will kick in on what that means for the presser. A decent bounce of 100 pips or more would look a good shorting opportunity if you believe that Draghi will not let the euro go higher by following up with dovish talk in the presser, and/or going gung-ho on QE
Be in no doubt that it's a risky trade. The main risks being that QE comes in around or worse than expectations or that Draghi isn't as dovish as expected. If that's the case you need to be quick and get out, and maybe turn long if you can move fast enough. I'll repeat though that this is a potential trade IF they leave rates alone. There are plenty of other variables for different trades but this one could be clear cut and that's my reasoning for thinking about it.
