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European markets trade lower
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DE30 bounces off the lower limit of trading range
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Daimler to limit production amid semiconductor shortages
European markets are trading lower during the final session of the week. Biden's economic plan failed to lift indices and judging by the market reaction, it was somewhat disappointing. Some reports surfaced saying that Angela Merkel wants to tighten German lockdown measures further as coronavirus deaths continue to rise and it may have contributed to pressure seen in the markets today.
Source: xStation5
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Create account Try a demo Download mobile app Download mobile appDE30 has failed to break above the resistance zone ranging between 13,980 pts and 61.8% retracement (14,000 pts) and launched a downward move afterwards. However, decline was halted at the lower limit of the current trading range in the 13,875 pts area. A point to note is that an important technical support - 200-hour moving average (purple line) - can be found in this area as well. This moving average has halted declined in the previous week as well as served as a final support during this week's sell-off. A recovery move that followed has been halted by the 50-hour moving average around the midpoint of the range (13,940 pts area). Dropping below a mix of support at the lower limit of the trading range would create a bearish bias in the markets.
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According to the Handelsblatt report, Daimler (DAI.DE) is set to limit production and cut working hours at a factory in Bremen due to shortages in the global semiconductor market. Daimler also announced it will reduce working hours in the Rastatt factory earlier in the week. Similar move was announced by Volkswagen (VOW1.DE) on Wednesday with lack of semiconductor being the reason as well.
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Daimler (DAI.DE) launched today's trading lower being pressured by reports about a production cut in another factory. However, the daily low was reached at the short-term upward trendline, slightly above the €57 support area, and the stock has been regaining ground since. As the sequence of higher lows is present on the chart, a return towards €58.50 resistance cannot be ruled out. Source: xStation5
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