Euro Stocks Stall On Hawkish Lagarde Comments

Hawkish ECB CommentsThe DAX continues to hold within the 15642.76 – 16278.35 range this week. Hawkish comments from ECB’s Lagarde at the bank’s Sintra Symposium have acted as a headwind, keeping prices weighted to the downside despite some initial strength in the week.  The ECB chief reaffirmed the bank’s commitment to pushing ahead with further tightening and warned that it is unlikely in the near-future that the bank will be able to say that rates have peaked. Lagarde’s main concerns remains the prospect of inflation becoming entrenched at higher levels and with this in mind has signalled the need for further tightening.Growth Concerns Weighing on StocksGrowth concerns in the eurozone have started to re-emerge recently, adding further uncertainty for stock traders. With rates high and expected to continue higher, traders anticipate a sharper slowdown in the eurozone across the year. With parts of the eurozone, such as Germany, already in recession, traders are keeping a close eye on eurozone-wide indicators such as the recent PMIs which reflected a downturn in both factory and non-factory sectors. With the ECB pressing ahead with further tightening and growth concerns clouding the eurozone outlook, stocks look vulnerable to downside shocks moving forward.Technical ViewsDAXThe reversal lower from recent highs above the 16278.35 level has seen the market trading back down to 15642.76. This level is holding as support for now, keeping the bull trend intact. However, with price holding below the broken bullish trend line, risks of a deeper drop are growing. Below current support, 15163.41 is the next support to note.