8:30am (NY Time) EU Trichet Press Conference
ACTION: EUR/USD BUY (Hawkish) SELL (Dovish)
Trichet will deliver an official statement along with a Q&A session afterwards. This press conference is usually very volatile and the market is always looking for clues from Trichet’s tone for future monetary policy directions. If Trichet is hawkish over the future of EURO, namely talking about exit strategey and possibility of hikig rates, then we will see EURO gain; if Trichet is dovish, focused on the real picture of the recovery, then we will see EURO trade lower against all other currencies.
Fair Warning: “If you have never traded this release, it is better to stay out of the market. Wait until around 9:30am~10:00am NY Equity open, then follow the trend. If Trichet is hawkish or being optimistic, then EUR/USD will gain throughout the session and may even carry over to Friday. Therefore there are plenty of opportunities to trade after the market has already established itself.
This Press Conference is usually done in 2 parts, the first part is a written statement which various newswire services will release headlines immediately at 8:30am, then Trichet will read through the statement; 2nd part of the press conference is a Question and Answer session where Trichet will take questions live from onsite media members. This part is highly unpredictable as Trichet may hint the market and drive prices intentionally. As I once heard from someone who knows Trichet personally, that there is never a slip-of-tongue with Trichet, he does everything intentionally.
However, Trichet is pretty good in maintaining a neutral stance, but sometimes market may read too much into his statements and move excessively… so once again, if you have not traded this release before, best to stay out.”
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