Stocks Bounce After the ECB Decided to Add More Accommodation

Stock markets have been declining today but the ECB offered a boost, sending them 100 pips higher


Stock market have been in a pullback mode lower since the US session yesterday and Dax30 even broke below the 50 SMA on the H4 chart. The picture was starting to look quite bleak for indices as the sellers kept control of the situation the entire day until the European Central Bank came along. The ECB decided to throw the towel and accept defeat regarding the promise to hike interest rates this year. that is a positive for stock markets since it would mean more investment since borrowing rates would remain lower. But, they also decided to add more TLTROs. ECB will start a series of two-year TLTROs in September and that means more free cash to go around.

This reversed the stock markets and sent indices higher. Dax jumped above the 50 SMA once again climbing exactly 100 pips. Although, it has given back half the gains and the price is deciding now whether to keep above or below the 50 SMA. Well, this is one thing which should be positive for stock markets for some time to come.

ABOUT THE AUTHOR See More
Skerdian Meta
Lead Analyst
Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.

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