Stock rally eases on US-China tensions

• Stocks trim gains on China-US tensions

• FRA40 paints double top at 4,780 pts

• Chairman of Renault (RNO.FR) tries to calm employees after strike

Stocks in Europe launched a new week with big bullish gaps in a sign of relief that Trump refrained from announcing any significant actions against China on Friday. However, a big portion of gains was erased following reports that China plans to halt some purchases of US farm products. Reports have not been officially confirmed yet therefore US politicians may abstain from addressing them. Nevertheless, keeping track of Donald Trump's tweets will be a good idea.

Liquidity during today's European cash session is a bit thinner as some stock exchanges are shut for holiday. This relates to German, Swiss, Austrian and Scandinavian stock exchanges. However, DAX futures (DE30 on xStation) trade as usual.

Source: xStation5

FRA40 launched today's trading higher along with other major European benchmarks. However, the French index failed to break above its recent peak at 4,780 pts before news on China's purchase of US farm goods hit the market. In turn, a double top pattern can be spotted on the chart. Break below Friday's low at around 4,660 pts could see downward move accelerate. 4,550 pts area is a potential target of this technical pattern. Note that 4,550 pts has seen a few price reactions recently. Slightly above this zone one can find a lower limit of the Overbalance structure that may act as a brief support (around 4,585 pts). Traders should stay on guard and look out for any China-US related news as they are likely to become much more important if China actually halts purchases of US farm products.

Renault (RNO.FR) managed to break above the upper limit of its trading range last week. Stock made a successful retest of the price zone at €20 and may look towards recent peak (€23.15). Source: xStation5

Bloomberg reported that top executives of Airbus (AIR.FR) are planning to meet this week in order to discuss adjustments to production rates. Meeting will focus primarily on production rates for the top selling A320 narrow-body jet. However, as Airbus already slashed output by a third in April (to 40 jets per month), it isn't sure that executives will decide on another reduction.

Renault (RNO.FR) announced on Friday that it plans to cut 14,600 jobs worldwide, including 4,600 jobs in France, in an attempt to clash costs. The announcement triggered an employee strike at the company's factory in Maubeuge, northern France. However, it seems there was some misunderstanding and employees thought that the production plant they work at will be shut. Jean-Dominique Senard, Chairman of Renault, tried to calm tensions on Sunday assuring that there is no and there never was a plan to close that factory.

Subsidiary of Iberdrola (IBE1.ES) secured 72 wind turbines from Siemens Games (SGRE.ES) for a wind farm project in France. 

Iberdrola (IBE1.ES) took out a resistance zone ranging around 50% retracement of the February-March sell-off last week (€9.55). Stock is pulling back today and the aforementioned zone is the first major support to watch. Source: xStation5