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European stocks started the day lower
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DAX tests short-term support at 12,550 pts
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HelloFresh (HFG.DE) gains as German coronavirus cases accelerate
Stocks in Europe are taking a step back today amid recent increase in US-China tensions. Donald Trump signed executive orders targeting TikTok and WeChat and has drawn criticism from Chinese authorities by doing so. Apart from that, investors await July's NFP data after ADP showed a weak jobs growth.
German industrial production increased 8.9% MoM in June, beating 8.1% median forecast. However, production was still 11.7% lower than a year ago (work day adjusted data). Exports increased 14.9% MoM, making the biggest monthly jump in almost three decades. Exports to China were 15.4% higher than in June 2019 while exports to the United States were 20.7% lower.
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Source: xStation5
DE30 is pulling back after making a few failed attempts of breaking above the 200-hour moving average in recent days (purple line). The index is making a break below the support zone at 12,550 pts, marked by 38.2% retracement of last week's upward move.Traders should focus on limits of the short-term consolidation from July 30-31 as near-term support levels - 12,480 pts (50% retracement also) and 12,300 pts. On the other hand, should we see a recovery, the aforementioned moving average will be a resistance to watch (12,650 pts area currently). Release of the US labour market data is the main risk event today (1:30 pm BST) and traders should keep in mind that equities may experience increased volatility.
DAX members at 10:07 am BST. Source: Bloomberg
More than 1,000 new coronavirus cases have been reported in Germany for two days in a row. Rising pandemic concerns are supporting the share price of HelloFresh (HFG.DE), a food delivery company. HelloFresh had a very strong Q2 due to lockdowns and other restrictions. Company gains 2% today and is one of the strongest German stocks.
Adidas (ADS.DE) pulls back after painting a shooting star candlestick pattern yesterday. Company reported a 35% YoY sales drop in Q2 2020 and a net loss of €333 million yesterday. However, online sales jumped 93%. Adidas said that it expects the third quarter to be profitable as all the major lockdowns were lifted already.
Adidas (ADS.DE) painted a shooting star pattern yesterday on the daily chart after failing to break above the upper limit of the trading range at €247.50. Should the pullback continue, the lower limit of the range at €230 will be the level to watch. Source: xStation5
