ECB Slows Pace of Interest Rate Hikes with 25 Basis Point Move

The ECB's decision to slow the pace of interest rate hikes can be interpreted as a less hawkish move than market expectations and may create short-term pressure on the EUR. However, the RSI14 at 23.75, in oversold territory, indicates that the decline may be limited. The MACD is negative and below the signal line, but the gap is very small, so momentum is weak. The price is trading slightly below the SMA20 and SMA50, supporting the short-term downward trend. Nevertheless, due to oversold conditions, limited weakness is expected rather than a sharp decline.

The ECB's slowing pace of interest rate hikes can be interpreted as a relatively dovish signal for the EUR and may create downward pressure on EURTRY. However, since TL-specific dynamics and the inflation differential dominate EURTRY, this effect may remain limited. Technical indicators already point to a weak picture: RSI at 34.8, close to oversold territory, price below SMA20 and SMA50, MACD below the signal line. This suggests that the downward trend may continue in the short term, but the decline may be limited. Nevertheless, the impact of the news may be limited and mixed; additional confirmation is needed for a strong directional signal.

The ECB's decision to slow its rate hike to 25 basis points may have a limited impact as it aligns with market expectations. On the DAX, the RSI at 29.5 is approaching oversold territory, and the price is trading below both the SMA20 and SMA50, indicating a weak technical outlook in the short term. The MACD is negative and below its signal line, but since the slowdown in the pace of rate hikes is not a hawkish surprise, downward pressure may remain limited. Nevertheless, the signal that the ECB has not yet ended its tightening cycle may not fully ease risk appetite. In the 1-3 day horizon, the index is likely to remain flat or slightly downward, with the potential for a limited rebound due to an oversold reaction.