Advertise | Bookmark | Contact Us | E-Mail List |  | Update Page | UraniumSeek.com 

Commentary : Gold Review : Markets : News Wire : Quotes : Silver : Stocks - Main Page 

 GoldSeek.com >> News >> Story  Disclaimer 
 
Latest Headlines

GoldSeek.com Radio: John Embry and Charles Hughes Smith, and your host Chris Waltzek
By: radio.GoldSeek.com

Amid Bad Fundamentals, Gold Sector Rally May Have Begun
By: Gary Tanashian

Bitcoin Proves You Cannot Have Your Digital Cake and Eat it Too
By: Nathan McDonald

Relief Rally in Gold Mining Stocks
By: Jordan Roy-Byrne CMT, MFTA

The Morgan Report's Weekly Perspective
By: David Morgan

Outlook for gold – 2018
By: Alasdair Macleod

Stephen Poloz Right To Be Worried
By: Peter Diekmeyer

The Yield Curve And The Boom-Bust Cycle
By: Steven Saville

Gold Seeker Weekly Wrap-Up: Gold and Silver Gain Roughly 1% on the Week
By: Chris Mullen, Gold Seeker Report

Ira Epstein's Metals Video 12 15 2017
By: Ira Epstein

 
Search

GoldSeek Web

 
ECB QE program taking shape

By: Dan Norcini

 -- Published: Sunday, 18 January 2015 | Print  | Disqus 

More and more it appears as if we are going to get some form of QE next week out of the ECB. The big question is the size and scope of the program that most expect to be announced.

There has been some discussion as to whether the ECB would buy various government bonds across the board or whether the actual Central Banks of the respective Euro zone nations would buy their own government bonds as the composition of the actual bond buying program.

Apparently there is a political dimension to any sort of widespread ECB bond buying as the largest nation in the Eurozone in terms of its ECB capital shares and overall economy, Germany, stands to bear the greatest risk should any one nation default on its bonds and be unable to repay the ECB. Germany would be the chief nation that would have to step up to try to make this good, thus the Germans are understandably concerned about this.

What appears to be shaping up, according to a report in Der Spiegel, is that each national central bank would be able to purchase up to 20%-25% of its outstanding national debt. That would spread the risk around the Eurozone and assuage some of Germany’s concerns.

Chart20150116092556

The Euro has continued to fall sharply in today’s session and has hit a TWELVE YEAR LOW against the US Dollar, having broken well below the lows made during the worst of the European Sovereign debt crisis.

In looking at some possible support zones that might temporarily stem the bleeding, we have that November 2003 low near the 1.1400 level. Below that is Fibonacci retracement support at the 61.8% level near 1.1266.

The ADX line is rising indicating that this is something that has the potential to be a long term trend. That is being confirmed by the highest level in the Negative Directional Movement Indicator ( -DMI) since 2008, during the height of the US credit crisis and the huge Yen carry trade unwind.

The short euro trade is a very large sized trade at this moment as traders pile in to take advantage of what they believe will be a move by the ECB on the QE front. I have read some comments from some, and I tend to agree with them, that to keep the market happy, the program will need to be somewhere near the equivalent of $1 trillion US. That has been close to the size of most of the Fed’s programs.

Anything less than that or of insufficient scope in traders’ minds to actually produce a tangible result, is going to leave the market disappointed. With last night’s Eurozone inflation numbers on everyone’s mind, the pressure is on the ECB to come up with something that will produce the intended effect.

QE programs, no matter what we might think of their merits or lack thereof, have been effective at halting the downward slide in both the UK and US economies. The jury is still out on the Japan experiment but it does seem to have at least halted the slide there to some extent. The market is hoping that an ECB version will have similar results as they are desperate to avoid job losses in the Eurozone that would inevitably accompany an disinflationary environment.

What the hope is that the sinking crude oil prices will have a positive impact on both business and consumers in the energy dependent Eurozone while simultaneously getting a boost from a QE program. That grand experiment continues…

Chart20150116093729

Meanwhile gold is enjoying this as it has worked right to the top of a major chart resistance level. That is the last thing standing between it and a potential run to near the psychological $1300 level. AS you can see on the chart, it is above the 200 day moving average now for the first time since August of last year.

Chart20150116094358

It has already pushed past the 1100 Euro level on the Eurogold chart. It has overhead resistance at the KEY 50% Fib retracement near 1122. Just above that lies horizontal resistance that stiffens as one nears the round number 1150 region.

http://traderdan.com/


| Digg This Article
 -- Published: Sunday, 18 January 2015 | E-Mail  | Print  | Source: GoldSeek.com

comments powered by Disqus



 



Increase Text SizeDecrease Text SizeE-mail Link of Current PagePrinter Friendly PageReturn to GoldSeek.com

 news.goldseek.com >> Story

E-mail Page  | Print  | Disclaimer 


© 1995 - 2017



GoldSeek.com Supports Kiva.org

© GoldSeek.com, Gold Seek LLC

The content on this site is protected by U.S. and international copyright laws and is the property of GoldSeek.com and/or the providers of the content under license. By "content" we mean any information, mode of expression, or other materials and services found on GoldSeek.com. This includes editorials, news, our writings, graphics, and any and all other features found on the site. Please contact us for any further information.

Live GoldSeek Visitor Map | Disclaimer

The views contained here may not represent the views of GoldSeek.com, its affiliates or advertisers. GoldSeek.com makes no representation, warranty or guarantee as to the accuracy or completeness of the information (including news, editorials, prices, statistics, analyses and the like) provided through its service. Any copying, reproduction and/or redistribution of any of the documents, data, content or materials contained on or within this website, without the express written consent of GoldSeek.com, is strictly prohibited. In no event shall GoldSeek.com or its affiliates be liable to any person for any decision made or action taken in reliance upon the information provided herein.