GER30 Cautious Ahead of Central Bank Galore
GER30 - H1
The Index is cautious around 15,500 as market participants brace for the monetary policy decision of the US Federal Reserve today, followed by the European Central Bank (ECB) and the Bank of England (BoE) on Thursday.
The ECB has adopted a very dovish rhetoric recently, with President Lagarde at the forefront. On Thursday, markets will be looking for any updates in regards to the assets purchase programs, the updated staff projections and Ms Lagarde's press conference.
The European Central Bank launched the Pandemic Emergency Purchase Programme (PEPP) last year, to combat the economic fallout of Covid, with an envelope of €1.85 trillion and a horizon of at least until March 2022. It also runs the pre-existing 20 billion/month Asset Purchase Programme (APP).
GER30 has entered its third losing day, as cautious mood prevails, with fears around Omicron resurfacing. Yesterday, World Health Organization (WHO) Director-General, Dr Tedros Adhanom Ghebreyesus, said that "Omicron is spreading at a rate we have not seen with any previous variant. I need to be very clear: vaccines alone will not get any country out of this crisis" and noted that 77 countries have reported cases of the new variant. [1]
Past Performance: Past Performance is not an indicator of future results.
Near-term bias is on the downside and the index is exposed to its 200Day EMA (at around 15,250-15,300), although October's lows (14,810) appear distant at this stage.
On the other hand, bulls show resilience and have the ability to return above the EMA100 (black line), but a catalyst will likely be need for new December highs (15,845), that will bring the all time highs back into the spotlight (16,302).
In any case the next leg of the move will likely be determined by the central bank outcomes and the rest of the vents on this week's busy economic calendar, which have the potential to increase volatility.
Nikos Tzabouras
Senior Financial Editorial Writer
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. With extensive experience in market analysis and a strong foundation in international relations, he brings a unique perspective to financial markets. Nikos emphasizes not only technical analysis but also on fundamentals and the growing influence of geopolitics on financial trends.
As a Senior Financial Editorial Writer, he delivers comprehensive and forward-looking insights across a wide range of asset classes, including equities, commodities, and currencies. His work explores how macroeconomic events, political developments, and global policies impact market dynamics, providing readers with a deeper understanding of both short-term movements and long-term trends.
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