Tuesday, February 28, 2012
During today's webinar, we briefly discussed what traders should expect to happen in the currency market during tomorrow's 3-yr LTRO (Long Term Refinancing Operation) performed by the European Central Bank. On tomorrow, the ECB will be allowing Eurozone Banks to borrow an unlimited amount of money at a low interest rate of 1.00% for a 3 year time period. This operation was done to provide greater stability to the banking sector and with the hope that excess liquidity will encourage financial institutions to invest in peripheral sovereign debt for the purpose of bringing their borrowing costs lower. Many experts are still uncertain about the effects of this 2nd 3-yr LTRO and whether it will cause an increase in risk appetite or dampen risk sentiment. Some investors have chosen to sit on the sideline ahead of the major announcement and this is the reason for today's light trading volume.
Monday, February, 27, 2012
In today's video, we discuss the price action for the EUR/USD pair and the reasons for the bearish market sentiment during most of the trading day. Although we saw US dollar strength throughout today's trading session, this bearish move was really the result of profit taking ahead of Wednesday's LTRO operation from the ECB. The pair slid ~ 113 pips from the session high at 1.3480 and it found support at 1.3366. The EUR/USD pair is currently in consolidation ahead of the Asian Open.
In today's technical analysis video, we will identify various trade entries around support & resistance levels.