Euro Index - ECB decision
Today we consider the currency index &EUR_Index composed on the basis of the Personal Composite Instrument - PCI technology. The index is designed to show the basic European currency fluctuations (EUR) against other segments of the Forex market. As a systematic market indicator we will use a portfolio of the most liquid currencies traded against the main European currency: EUR/[USD(4.35%) + JPY(18.2%) + GBP(18.8%) + CHF(19.2%) + AUD(19.8%) + CAD(19.65%)]. The price of each currency is expressed in USD. The weights are defined according to the currency liquidity relative to the volume of international bank circulation. Get more details and online index chart by clicking here.
Note that &EUR_Index reaction on the fundamental economic events in Europe is the most obvious and sustainable: the index forms a stable trend channel, meanwhile it is less susceptible to the fundamental events of other currencies. Let us remind you that the ECB meeting took place on Thursday and the interest loan rate was announced to remain unchanged at 0.05% per annum, deposit rates at -0.2%. This news was reported despite the promises of a prompt QE launching to boost the EU economy. The ECB statement caused a temporary euro weakening against the most liquid currencies. However, the result was predicted by the majority of the economists and the long-term bearish trend has not been formed. Currently, &EUR_Index is waiting for new fundamental signals, and it is still in a state of a long-term uncertainty despite the positive US data.
After opening a position, the opposite one can be deleted: we give an opportunity for the market to choose the direction. Stop Loss is to be moved after the ParabolicSAR values, near the next fractal high (sell position) or fractal low (buy position). Thus, we are changing the probable profit/loss ratio to the breakeven point.
| Position | Sell |
| Sell stop | below 0.99542 |
| Stop loss | above 1.00644 |
| Position | Buy |
| Buy stop | above 1.00644 |
| Stop loss | below 0.99542 |