DAX 40 Reacts Positively to ECB's Rate Cut Decision
Yesterday, the European Central Banks Governing Council cut the refinancing rate, as expected, from 4.25% to 3.65%.
The ECB also stated that monetary policy would remain sufficiently restrictive "for as long as necessary" to ensure inflation returns to its medium-term target of 2%.
Financial markets responded with:
A strengthening of the euro. EUR/USD rose by more than 0.5% after the rate cut announcement.
A rise in European stock market indices.
For example, Germany's DAX 40 index (Germany 40 mini on FXOpen) received a bullish boost, which supports more optimistic conclusions in today's technical analysis:
Price movement fits within the ascending channel shown in blue.
The thickened line highlights that the median of the channel repeatedly acted as support before early August. As indicated by the arrow, it regained this role after the sharp decline on 5 August.
The linear regression channel (shown in purple) points to upward momentum.
Investors may feel optimistic, expecting that this autumn demand forces could lift the DAX 40 (Germany 40 mini on FXOpen) towards the upper boundary of the channel.
Read more: https://fxopen.com/blog/en/oa-dax-40-reacts-positively-to-ecbs-rate-cut-decision/
Text source: Forex Trading Blog
