• European stocks have started slightly lower trimming gains after the ECB
  • DAX (DE30 on xStation5) has failed to break a key resistance
  • Volkswagen (VOW.DE) advances moderately as ex-VW engineer to appeal prison sentence

The latest hours on the financial markets have been exceptionally stormy. Firstly, the European stock markets halted their gains following the ECB’s monetary policy decision. Secondly, the greenback’s rout seen overnight contributed to mounting uncertainties as the US 10Y yield declined just shy of 2%. Even as the EURUSD has trimmed some of post-ECB gains, it has remained above the level from before the decision.

link do file download linkThe DE30 has failed to break above a key resistance zone but it’s likely to try to do so yet again. Source: xStation5

Technically, the DE30 failed to break its critical resistance zone. As a result, a bearish candlestick has been drawn as buyers have stepped back. Nonetheless, even as the price has opened lower in the morning, it has managed to stay above a local support area placed at 12240 points. This level is underpinned by a cluster of two Fibonacci retracements which could enhance odds for bulls to move higher. Having said that, should the price breaks 12320 points on a daily time fame, it could lead to an extended move higher as stop loss orders might be activated speeding up a possible increase.

link do file download linkA daily time frame could hand an advantage for bulls as the price has remained above 12240 points. Source: xStation5

On the other hand, even though buyers are unable to break through a red rectangle (resistance), it won’t mean that their defeat is a foregone conclusion. One could notice that a support in the vicinity of 12165 points might be notable level to watch as well. Hence, until the price breaks it durably on a daily interval, a move higher is still on the cards. Let’s point out that 12165 points had been tested twice before it was smashed finally.

link do file download linkRWE (RWE.DE) and Volkswagen (VOW.DE) are among top movers in early Friday’s trading. Source: Bloomberg

The Asian session brought quite the equivocal landscape. The Hang Seng (HKComp) turned out to be the best performer gaining as much as 0.5%. Besides that index moods were not so rosy. Namely, the Shanghai Composite (CHNComp) closed unchanged, the NIKKEI (JAP225) lost 0.6% whereas the Australian S&P/ASX 200 edged down 0.3%.

In Europe, the major indices have not beamed with happiness so far as the euro’s surge could be a hurdle for them. However, losses are not substantial with the CAC40 (FRA40) being the worst performing index losing 0.3%. On top of that, the DE30 is falling 0.1%, the EuroStoxx50 (EU50) is slipping 0.15%, the FTSE100 (UK100) is dropping 0.25% while the Italian FTSE MIB (ITA40) is advancing 0.05%.

Company news

Volkswagen (VOW.DE) is stacking up well against its peers within the German DE30 with a gain close to 1%. There were not specially notable reports though. Nevertheless, it’s worth mentioning that VW ex-engineer James Liang, who pleaded guilty in October for his role in conspiring to cheat US emissions tests, has appealed against his recent sentence.

On the flip side, RWE (RWE.DE) is declining on concerns that Brexit negotiations could have substantial side-effects within the energy industry. The conventional wisdom suggests that the UK may leave the emissions trading system due to concerns about the EU Court of Justice, however there has been no an conclusive decision yet.