ECB Raises Rates: 25 Basis Points Against Energy-Driven Inflation

The ECB's 25 basis point rate hike, as a tightening step against energy-driven inflation, may reduce risk appetite. In global markets, aggressive rate hikes by central banks could trigger recession concerns, pressuring stock and commodity prices. In Turkey, TL assets may be negatively affected by the increased global risk aversion environment due to the ECB's tightening; however, domestic dynamics and CBRT policies will be decisive. In the short term, the overall market direction may be downward.

The ECB's 25 basis point rate hike, as a tightening step against energy-driven inflation, may have a mildly positive short-term effect on the EUR. However, the market may have largely priced in this decision; indeed, EURUSD has fallen 0.30% in the last 24 hours to 1.1601, and RSI14 at 26 is approaching oversold territory. MACD is negative and below the signal line, indicating that downward momentum has not yet weakened. The fact that SMA20 and SMA50 are almost at the same level around 1.1635 suggests that the short-term sideways-to-downward trend continues. The impact of the rate hike may be limited; unless the 1.1580-1.1600 support is broken, reaction buying may be seen, but an additional trigger is needed for a sustained rise.

The ECB's 25 basis point rate hike, while a positive signal for the EUR in the short term, may have a limited effect on the EURTRY pair. Technical indicators already point to a weak outlook: RSI at 36.7 is near oversold territory, MACD is below the signal line, and the price is slightly below the 20-day moving average. This suggests that the optimism generated by the news could be offset by selling pressure. Nevertheless, the EUR's tendency to appreciate after a rate hike increases the likelihood of an upward reaction in the pair, albeit limited. However, due to overall technical weakness, the direction is considered downward; confidence should be kept low.

The ECB's 25 basis point rate hike, as a tightening step against energy-driven inflation, could support the EUR and create downward pressure on the DXY. However, the DXY's latest close was 99.11, up 0.47% in 24 hours, and its RSI14 is 74.8, in overbought territory. The MACD is positive and the price is above the SMA20 and SMA50, so the technical outlook remains strong. The impact of the news may be limited; the ECB decision may already be priced in, and the DXY is expected to maintain a sideways or slightly upward bias in the short term. Nevertheless, gains in the EUR could limit the DXY.