• European stock markets have begun higher ahead of EMU inflation
  • DAX (DE30 on xStation5) rejects a try to break a key resistance
  • HeidelbergCement gains in the aftermath of the Citi’s recommendation

Today’s data on EMU is unlikely to be conclusive but could steer markets’ expectations ahead of the ECB’s meeting in September. As a result, both the euro and the German DE30 could be volatile. On the other hand, one needs to add that the German bourse could gain a foothold if the ongoing corrective move on the EURUSD persists. Either way, a technical view remains crucial to watch in order to foresee future swings.

link do file download linkThe DE30 has rejected a try to break its first relevant resistance zone as of yet. Until this level is broken, more sustained upward moves may be contained. Source: xStation5

Having considered taking a long as for now, one needs to say that cautiousness appears to be warranted. The price has failed to break out of a resistance area so far, thus a pullback could be in the offing. Moreover, a rejected resistance line coincides with a 50% retracement of the latest downward swing. That said, extent of importance of that level seems to be yet higher. Finally, the DE30 is drawing a bearish candlestick on a H4 time frame, hence entering a long right now seems to be risky.

Nevertheless, if the EURUSD keeps on going down in the nearest future, it could plays into the hand of the German index. Otherwise, overall risk sentiment has improved lately which could lift equity markets all around the world, the DE30 should not be an exception and could benefit from that sentiment as well. Anyway, it’s worth mentioning that a key support line is still at 11800 points, the price has a long way to find itself there though.

link do file download linkThe DE30 is gaining momentum in early trading being fueled by HeidelbergCement. Source: Bloomberg

At first, let’s sum up the Asian session which brought a long awaited correction in the Hang Send Composite (HKComp) which lost 0.7%. Elsewhere, the Japanese NIKKEI (JAP225) increased 0.7% (an effect of the higher USDJPY), the Shanghai Composite (CHNComps) was almost flat losing a mere 0.08% whilst the Australian index (AUS200) gained as much as 0.8%, a sturdier release with regard to capital expenditure could have helped.

Looking through the European markets there are gains across the board. The DE30 is rising 0.6%, the French CAC40 (FRA40) is moving up 0.45%, the EuroStoxx50 (EU50) is adding 0.6% and finally the FTSE100 (UK100) is marching higher 0.5%.

Company news

Taking a closer look into the DE30 one could notice that HeidelbergCement (HEI.DE) is by far the best performing stocks as for now. It’s a consequence of the recommendation from Citi as the bank decided to upgrade the stock to buy with the new price target placed at 95 EUR implying a decent 20.5% upside compared to the last close.

Besides, Lufthansa (LHA.DE) is in demand as well following the report which has been deliver by the company. The firm announced that the Taiwanese airline EVA Air has renewed its contract for the flight planning solution for another five years. The system is delivered by the Lufthansa Systems, an information technology service provider for the aviation industry.