The Euro Shorts Have Been "Ready To Fight".

The European Central Bank (ECB) unexpectedly lowered its three interest rate and relaxed scale last night, triggering a short-term setback in the euro, but more frenzied is the next 90 minutes. The European central bank governor Delaki said that the ECB is not expected to further reduce interest rates, and the central bank has decided not to set up a two level interest rate system.

In other words, loose monetary policy ends here.

This statement is more powerful than overweight and lax. At least interest rate cuts and loose markets are expected, but the message Delaki delivered after the meeting is that they did not see the need for follow-up stimulus.

Therefore, at least in the next 2-3 months, the central bank will not take any action.

Subsequently, the euro / dollar staged a reversal of the drama, the hurricane nearly four hundred points, and not only ordinary investors, top investment banks also took the initiative, after the European bank announced interest rate resolution, Citigroup immediately announced its strategy report, after euro bank cut interest rates in 1.0879 short euro / dollar, target 1.04-1.05, stop loss 1.1080, the bank used

15% of capital is traded.

Without considering the cost factors such as point difference, if Citigroup really did the deal, it would lose more than 200 points in just a few minutes.

In fact, before the euro bank resolution, shorting the euro is still a consensus among market investors.

Position data show that the euro short positions close to the 2015 high.

Before the European Central Bank's interest rate decision, the euro's short selling position has increased, suggesting that the euro shores have been "ready to fight".

CFTC (US Commodity Futures Commission) released last week that hedge funds and other leveraged investors increased their net 17495 hand contracts in euros in the week ending March 1st.

Obviously, the short time of the empty repurchase intensified the upward trend of the euro.

Omer Esiner, chief market analyst at Commonwealth Foreign Exchange, said: "we see that investors are making up for shorts because Delaki said he expects no further cuts in interest rates.

But I believe that when the dust settles, the euro will still go down, because the ECB's portfolio of policy tools today exceeds market expectations and is now in Europe.

Before the meeting, the market was far less powerful than the previous meeting.

Our trading strategy is still tactical trading against the euro.

We anticipate that before the ECB meeting, the euro will weaken further as investors continue to bounce back in the bear market and investors will further ease their expectations for the ECB.

We also expect that Delaki will try to avoid disappointing the market again.

However, we do not expect this to offset the impact of the global situation on the euro, just as the euro has been doing this year.

After the ECB meeting, we will buy the euro in dire terms, such as overreaction, and even buy it before that.

We expect that the global force will drive more of the euro under the bull market.

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Of course, there are always a few winners in the black swan market. Before the meeting, Bank of America and Merrill Lynch issued two major expectations: the conference quickly closed up the euro's empty positions, and then bought the bargain after the meeting.

The trend of the euro is also similar to that of Merrill Lynch, which is expected to decline to 1.0825 after the announcement of the European Central Bank's policy statement, and then rebounded to its three month high 1.1216..

Athanasios Vamvakidis, head of European exchange strategy at Merrill Lynch, wrote earlier: "if the euro weakens on Thursday, we may soon get a profit."

We believe that, just like the January Japan silver conference, the global factor is a more powerful driving force than the domestic foreign exchange monetary policy.

After the ECB meeting, we believe that US data and global market sentiment will become the main driving force of the euro.