DE30: European stocks pull back after Eurogroup failure

• Stocks pull back as Covid-19 cases jump and Eurogroup lacks consensus

• DE30 with a floor near 38.2% retracement (10,200 pts)

• Infineon (IFX.DE) gets final clearance to take over Cypress Semiconductor

Stocks in Europe are trading lower on Wednesday following massive reversal on Wall Street yesterday. S&P 500 trimmed 3.5% gain and closed 0.16% lower after coronavirus data began to deteriorate once again. Today's statement from Eurogroup saying that ministers failed to agree on funding measures also boosted risk aversion. The news triggered a 200 pts drop on DAX futures ahead of European cash session open. However, the meeting will resume tomorrow and it is said that only one country (the Netherlands) has not agreed yet. Having said that, there is high likelihood that an agreement on funding will be reached.

Source: xStation5

DE30 surged towards 10,500 pts following a break above the upper limit of the trading range. In turn, the index realized the range of a break from the pattern. Subsequent pull back below 10,400 pts is also an important development as this level marks 2018 lows and lack of break higher shows that bearish bias remains on the markets. The level to watch for now is 10,200 pts - 38.2% retracement of the February-March slump. Note that long, lower wicks of recent candlesticks on H1 interval show that there is bulls' camp near 10,200 pts. Breaking below it would pave the way for a test of the 10,000 pts mark. Should a reversal occur, closing above 10,400 pts could support buyers.

DAX members at 9:50 am BST. Source: Bloomberg

Infineon Technologies (IFX.DE) announced yesterday that it has received final clearance from regulators to take over Cypress Semiconductor (CY.US). The German company also said that funding to complete the deal has been already secured. Deal is valued at $10 billion.

Lufthansa (LHA.DE) issued a statement on Tuesday on next actions it plans to take amid slump in the aviation sector. The company will reduce fleets size by 43 planes. Moreover, Lufthansa said that it will shut down operations at one of its low-cost carriers, Germanwings.

Henkel (HEN3.DE) withdrew its forecast for fiscal 2020. The company said that rapid spread of the coronavirus makes reliable forecasting challenging. However, Henkel said that it expects organic sales to be 0.9% lower in the first quarter. The company will publish its quarterly report on May 11.

According to Bloomberg, Daimler (DAI.DE) experienced 15% drop in global deliveries in the first quarter of 2020.

Infineon (IFX.DE) made a break above the price zone at €14.50 yesterday. The stock launched today's trading lower but tries to recover and break above €15.00. However, should the pullback deepen, price may be set to test low from June 2019 (€14.43) as it coincides with the lower limit of the local market geometry (yellow boxes). Source: xStation5