Trichet announces quantitative measures. Comments and actions send EURUSD on up and down ride
Trichet says to launch repo operations. To offer banks 12 month loans. This has sent the EURUSD sharply lower.
ECB will buy EURO denominated covered bonds.
- He adds that key rates are appropriate levels.
- He sees tentative signs of stabilization.
- Sees a small upturn beginning in 2010.
- The Eurozone is experiencing a downturn as is the rest of the world.
- Inflation pressures continues to ease
- Sees further fall in the job market
- Continued slowdown in monetary expansion
The EURUSD moved sharply lower through support at 1.3320 (100 hour MA)and 1.3305 (the 100 and 200 bar moving averages on the 5 minute intraday chart) on the initial comments. The low reached was 1.3261, above the low for the day reached earlier at 1.3251. The 200 hour moving average is currently at 1.3248. Since the lows the pair has rebounded back above these technical levels.
Risks have increased in the market as the market digests the news and comments. The price action remains contained but volatile. Waiting for calm after the storm may be in order. Comments by the often unpredictable central banker can lead to sharp moves at any time. The press conference generally lasts around 45 minutes.
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