QE3 Maybe Not on the Way

In Forex it is easy to be taken for a ride by many people, same goes the with popular Bernanke of late announcing a high possibility of QE3 this week. While many are pricing this into the Forex market before he speaks again this week there is still a possibility that it may not happen..

Do you want to hear the theory? Please note before i speak on this, this is only a theory, please do not trade off this post.

The Theory..

  1. The theory is that QE3 is not a effective as it used to be, so to do it again would not be efficient.
  2.  Not only that the US needed to push the QE3 to help boost the Euro which was boosted very effectively due to its release. Boosting the Euro in a sense if done right actually will help boost the US in the future and thus reduce fiscal worries in January being a popular trade partner.
  3. The fiscal cliff is not until January and acting now is not a good idea as printing more money will only put more pressure on consumer low spending which before an election is a big no no..
  4. Lastly, Obama would not approve it until after the election and he is reelected. Why would any president risk losing his seat over doing something so risky right now.
  5. While the fundamentals are not showing great signs of improvement, there is signs of improvement with a recent drop in unemployment.
qe3 yes or no, maybe no

So, with this theory what is more likely to happen, well not what the public is expecting, more likely a mild form of something that will have very little effect on the devaluation of currency. My opinion is 50 / 50 overall.. Because the price of QE3 is priced into currency already if it does happen then expect a rally on Euro or Gbp up say 150 to 170 pips, if it does not happen then expect a major sell off up to 250 to 300 or more pips.. Good luck all..

About Timon Weller

Timon Weller is the professional Writer and Trader behind the blog Forex Reviews. Timon Weller is also a professional Teacher of Price Action Trading and creator of the popular Training Series teaching people how to trade Price Action effectively called The Engulfing Trader. For other Forex Training available here at Forex Reviews click here.

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  1. Timon Weller says:

    Well, the Fed has done it again, created panic in the market place.. If only they started to actually focus on the problem rather than printing money then this US crisis would be over already.. I think even a 7 year maths student could do better..Unemployment is the issue so why don’t they create jobs and tax the rich fairly. The profit from the govt businesses created can then be used to create more govt businesses and more jobs. There, problem solved, however this is what we have been dealt so not much worth complaining. I am sure all the risk on bulls will love, unless of course you live in the US because now your savings are worth less. Regards

  2. Timon Weller says:

    Here is a video below on Romney who actually paid less tax than the average worker in the US in 2011. This shows how the Rich pay less and for a country that has a massive deficit that they cannot afford don’t you think they would stop focusing on devaluing money which effects the poor more and start looking at the facts.. What would 20 to 25% tax do in a country for people that earn over 1 million a year do for the country..? The truth is the GFC would not even exist if the rich just stood up and gave back from what they were handed during the colonial days.. Australia has over 30% tax for millionaires, why cant US tax the rich fairly..? And to think also this is Romney who is going for the Obama’s position.. What does that say for the US when even those going for powerful positions are greedy..??


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