Liu Xuefeng: The Real Suppression Of The Euro May Be The Carry Trade.

Last week, the European central bank failed to meet expectations. It announced that the target rate of refinancing would be 10 basis points to 0.15%, which is expected to be 0.10%. This is also the central bank's interest rate cut since November 2013.

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At the same time, the central bank also announced a lower a href= "//www.sjfzxm.com/news/index_cj.asp" deposit rate < /a > -0.1%, and President Delaki later said that the European Central Bank will implement a series of long-term operations, including a new 400 billion euro LTRO (long-term refinancing operation) and the implementation of ABS (asset backed securities) purchase. P

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"P" and the euro also fell sharply, but the day's decline did not continue. Then the long rally recovered and lost territory, which not only confused the market, but why the rate cut did not push the euro down sharply.

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< p > actually, otherwise, the a href= "//www.sjfzxm.com/news/index_cj.asp" > Europe < /a > the central bank's interest rate cut is basically the result that the market expected early, and the ECB launched many stimulus policies, which also made the market expect that the new quantitative easing policy is unlikely to be introduced in the next European central bank's "a href=" //www.sjfzxm.com/news/index_cj.asp "interest rate conference" /a >, which also led to the resuming of the lost land on the same day.

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< p > but the decline of the euro is not over. This is only the beginning. Here is a reminder that investors should not ignore the very important part of the foreign exchange market, the "carry trade". With the further interest rate cut by the European Central Bank, the deposit interest rate has fallen to 0, and the euro has become another low interest financing currency after the yen, so the alert investors will not miss this opportunity to make money.

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(P) using the euro as a financing currency, lending to the euro, selling in the market and buying a relatively high interest rate currency with a relatively stable interest rate, carrying out risk-free carry trade. The sell-off of such interest trading is bound to suppress the euro's downward trend. From the recent Euro trend, it is easy to see that the euro's rebound is very strong compared with other non US currencies, and the strength of the decline is very strong. Therefore, in the long run, the space for the downward trend of the euro will be further opened.

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< p > us, we see recently released US economic data, including the decline in the performance of non farm workers and unemployment rate in May, but still in sound growth. Compared with other economies, the US economic recovery is still relatively strong. Even if the current slowdown in the near future does not lead to a sharp decline in the US dollar, this has laid the keynote of the euro downward.

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"P >, therefore, if the US economy continues to recover steadily, and the low interest rate in the eurozone will continue to suppress the euro.

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< p > main currency trend analysis < /p >

< p > US dollar index: below the US dollar index today, the support level is 80.75 and 80.60, and the upper resistance level concerns 81, 81.20 < /p >

< p > Europe and America: the support position below today's Europe and the United States pays attention to 1.3500 and 1.3480, and the upper resistance level concerns 1.3550, 1.3580 < /p >

< p > Anglo American: below British and American underside, attention is 1.6720 and 1.6690, the upper resistance level concerns 1.6770, 1.6810 < /p >

< p > us and Japan: the support position below us and Japan today is 102.20 and 101.90, and the upper resistance level concerns 102.45, 102.65 < /p >

"P:" merry: below the us today, the attention is 0.8990 and 0.8965, and the upper resistance level is 0.9030, 0.9050 < /p >

< p > us plus: the support position below US Canada today is 1.0890 and 1.0870, and the upper resistance level concerns 1.0915, 1.0940 < /p >

Below P, Australia and the United States: the support level below Australia and the us today is 0.9360 and 0.9330, and the upper resistance level concerns 0.9390, 0.9410 < /p >

< p > Gold: below today's gold, support points are 1257 and 1250, and the upper resistance level concerns 1270, 1279 < /p >