DE30 tests short-term resistance at 15,560 pts

• European markets trade higher

• DE30 tests resistance at 15,560 pts

• Deutsche Bank and Deutsche Boerse reported Q2 earnings

European stock markets are trading higher on Wednesday, in spite of another downbeat session in Asia. German DAX (DE30) and UK FTSE 100 (UK100) are European underperformers gaining 0.2% each. Dutch AEX (NED25), Italian FTSE MIB (ITA40) and Spanish IBEX (SPA35) are the leaders gaining over 0.6% each. Top event of the day is the FOMC decision in the evening (7:00 pm BST). However, the US central bank is not expected to make any major announcements or changes to its policy.

Source: xStation5

Taking a look at DE30 at M30 interval, we can see that the index has found itself in an interesting technical place. The index is testing a short-term resistance zone at 15,560 pts - a hurdle that has limited upward moves yesterday and today during the overnight trading. Moreover, a short-term downward trendline, that also acts as the upper limit of the triangle pattern, can be found in the same area. Breaking above this hurdle could hint that a larger upward move may be on the cards. On the other hand, should the index fail to break above 15,560 pts area once again, a pullback towards the lower limit of the pattern could come next. Break below the upward trendline marking the lower limit of the pattern may be followed by a downward move and test of the next near-term support - 38.2% retracement at around 15,435 pts.

Company News

Deutsche Bank (DBK.DE) is the best performing DAX member today, following the release of solid Q2 earnings. German lender reported a small year-over-year drop in total revenue, from €6.29 billion to €6.24 billion. However, the market expected a drop to €5.93 billion, so it was a solid beat. Net income increased from €28 million in Q2 2020 to €795 million in Q2 2021. Fixed-income trading revenue dropped from €2.03 billion to €1.81 billion, but the market expected a drop to €1.67 billion so it was a beat as well. Moreover, major US investment banks saw trading revenue drop by an average of 43% YoY in Q2 2021, so Deutsche Bank's 10.8% drop looks solid. 

Deutsche Boerse (DB1.DE) reported Q2 EBITDA at €518 million, above the median estimate of €508 million and above last year's €483.1 million. Net revenue came in at €881.7 million, above €875 million expected and above €777.5 million reached in Q2 2020. Net income jumped from €288.1 million to €310.9 million. While results turned out to be better than expected, shares of Deutsche Boerse moved lower as analysts pointed to a big impact of one-off gains during the quarter.

Telefonica Deutschland (O2D.DE) reported Q2 revenue at €1.89 billion, slightly above the median estimate of €1.85 billion. EBITDA at €612 million was also higher than €584 million expected. However, the company reported a net loss of €38 million, deeper than €2 million loss expected. Markus Haas, CEO of Telefonica Deutschland, said that the company sees up to €1.3 billion in 5G investments this year. Asked about recent floods, Haas said that they will have a minimal impact on the company's financial results but rebuilding of the fiber network may take months.

Deutsche Boerse (DB1.DE) is the worst performing DAX member today. While earnings turned out to be better than expected, there is some concern about the big impact of one-off gains on Q2 financial results. Stock slumped below the price zone marked with 38.2% retracement of the upward move launched in March 2020 and is now testing mid- and long-term upward trendline. Breaking below would pave the way for a test of 50% retracement (€131.50 area). Source: xStation5