It is somewhat good in the short term, implying that ECB is aggressive into pumping back economy’s strength. This will appreciate EUR vs USD as well even for the short term, but if no good thing is happening, people will lose confidence with the Eur zone, and will not get any loans from Euro, mainly because if a default happens, euro currency will definitely go down to a possible 1:1 vs USD, making a lot of writedowns and currency losses.
What the good thing about this rate cut, is the short term effect, boosting morale, and european confidence, attract more loans and lessen Govt bonds (if loans are overflowing, but if not, will need to create more bonds, to coverup expiring ones). The bad thing is that, this 0.25% rate cut may not be enough, and may need to cut more and close it down to 1.00%, why? USD is only 1.00 rate. Why would companies get a loan on a Euro Zone, with a euro currency, if all expects Euro depreciation in the next years/decade.
After quite some time, expect more moves by the ECB. This should be a coverup, and need more rate cuts or helpful GDP generation tactics needed to boost the economy.
Euro currency which is currently uptrend,but has a high chance to breakdown once it hits below 1.35
Australia Index: 38% Retracement from the Top, and hits 4450, within the 4450-4500 resistance level.
HK Index: Very short term uptrend, but may stop once it hits 21,000 or if drops below 19000.
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