Sleepy Forex, Shooting Stocks

The Forex market has remained quiet all week with little going on. The major event in the calendar this week took place a few minutes before the time of writing, with the European Central Bank’s monthly announcements. As expected, they left interest rates unchanged and will leave the QE (quantitative easing) program in place until December 2017. The only surprise within this announcement was that the amount of the total QE will be tapered from April, from the existing €80 billion asset purchases each month to €60 billion.

 

A confirmed reduction in the QE program would logically strengthen the Euro (it effectively means less Euros in the money supply, making supply reduced), and the Euro spiked up quickly upon the announcement, before falling back and giving up all its gain against both the U.S. Dollar and Japanese Yen already.

 

 

Stock markets have been much more lively and tradable, with two key U.S. equity indices (the Dow Jones 30 and the S&P 500) making new all-time highs yesterday.

 

 

It can be hard to trade equity indices with low minimums and good spreads/commissions, but going long of major indices close to or at all-time highs is a good trading strategy, especially when the Forex market is very quiet.

 

EUR/USD

Adam Lemon

Adam Lemon began his role at DailyForex in 2013 when he was brought in as an in-house Chief Analyst. Adam trades Forex, stocks and other instruments in his own account. Adam believes that it is very possible for retail traders/investors to secure a positive return over time provided they limit their risks, follow trends, and persevere through short-term losing streaks – provided only reputable brokerages are used. He has previously worked within financial markets over a 12-year period, including 6 years with Merrill Lynch.