ECB Set to Become G7's Hawkish Leader with Interest Rate Hike

The European Central Bank's (ECB) interest rate hike could suppress risk appetite by increasing concerns over a global liquidity squeeze. Capital outflows from emerging markets may accelerate, putting depreciation pressure on fragile currencies such as the Turkish lira. In the short term, the BIST 100 is expected to see a sell-off, while bond yields may rise. However, the severity of the impact will depend on the ECB's forward guidance and the reactions of other central banks.

EURUSD is in oversold territory as the RSI drops to 18, increasing the likelihood of a short-term rebound, although news that the ECB is preparing for a rate hike creates a hawkish sentiment in the market. However, the price trading below the 20- and 50-day moving averages and the MACD being below the signal line in negative territory suggest that the downtrend may continue. While the headline supports the ECB's tightening steps, the market may have largely priced in this expectation, and the oversold conditions could limit the pace of the decline. In the short term, a bearish move is expected, but caution is warranted due to the oversold territory.

Despite the EURTRY's RSI being in oversold territory at 20.4, news that the ECB is preparing for a rate hike could strengthen the euro and put pressure on the Turkish lira. The MACD line is below the signal line and in negative territory, indicating that short-term bearish momentum may continue. The price is trading below both the 20-day and 50-day moving averages, presenting a technically weak outlook. However, due to oversold conditions, the pace of the decline may be limited, and some consolidation could occur in the near term.

News that the European Central Bank (ECB) is preparing to raise interest rates has intensified tightening concerns in the markets, potentially putting pressure on the DAX. Technical indicators support this view: although the RSI is approaching oversold territory at 36, the MACD remains below its signal line and in negative territory. Additionally, the price is trading below the 20- and 50-day moving averages. Selling pressure is likely to persist in the short term, but the pace of decline may be limited due to oversold conditions.