What Will Generate Volatility and Determine Trend for the Euro?

Talking Points:

• The Euro-area headlines continue to flood the newswires, however, volatility and trend value differs

• ECB QE started in earnest today, but its influence will be more like that of the BoJ-JPY: trend shaping

• Meanwhile, Greece is a vague uncertainty and the Euro's risk sensitivity is a loaded gun

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What is driving the Euro? Headlines between Greece and ECB are crossing the ticker rapidly, and fundamental traders must be able to separate what will materially alter speculative views and thereby provide change for the underlying exchange rate. For example, news of the first ECB purchases of assets in its newly adopted QE program was heavily priced in well before even the confirmation of the effort - but both historical examples from the US and Japan show that this theme can carry currency and markets much further. Greece's troubles continue to churn, but the extended time frame for negotiations dampen the potential impact from this crisis focal point. A 'risk' connection in the meantime is a less active driver of current price but represents a far greater threat due to that unknown quantity. We discuss what to watch out for when trading the Euro in today's Strategy Video.

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