DAX Falls Back Below 200-Day Average Following ECB Decision

Traders paid attention to today's ECB decision. Despite inflation unexpectedly hitting a record high yesterday (5.1% CPI inflation year-over-year), which fueled market expectations for a first interest-rate hike in more than a decade this year, the ECB renewed its pledge to withdraw pandemic stimulus only gradually.  

The Governing Council reiterated that it would slow bond-buying across 2022 and end asset purchases entirely before raising borrowing costs. However, there were no specific comments on rate increases.

However, the following presser sounded a bit more hawkish, sending the EURUSD pair higher and diving the DAX index.

Traders sold German stocks following the decision, pushing the DAX index back below the 200-day moving average (the green line). As long as the DAX trades below that 15,600 EUR, the short and medium-term outlooks seem bearish.

The significant support remains in the 15,000 EUR, and so far, every attempt to breach below it has been unsuccessful. 

On the other hand, should the index start moving higher again, the selling zone is expected near the 50 and 200-day averages again.