DOW is dropping more than -300 pts, or -1.2% as selloff accelerates. 24247.84 key near term support is now in focus. As noted previously, the corrective rise from 23344.52 should have completed at 25402.83. It should be in form of an ascending triangle. Sustained break of 24247.84 should confirm this view and target a test on 23344.52.
In addition, that will also affirm our view that fall from 25402.83 is the third leg of the corrective pattern from 26616.71. And we should at least see a test on 38.2% retracement of 15450.56 to 26616.71 at 22351.24 before completing the correction. Let’s see how it plays out.
ECB de Cos: Further rate hikes could be made in coming quarters
ECB Governing Council member Pablo Hernandez de Cos said today, “in the coming quarters, further (rate) increases could be made to reach levels in line with the natural rate of interest if the medium-term inflation outlook remains around our target.”
But de Cos also emphasized that the process of policy normalization would be gradual. “For this gradual approach to be adopted, it is essential that inflation expectations remain anchored and that no second-round and indirect effects of a magnitude that could jeopardise this anchoring materialise,” he said.
Another Governing Council member Olli Rehn said, “It seems necessary that in our policy rates we move relatively quickly out of negative territory and continue our gradual process of monetary policy normalization.”