Trump rejected the EU auto proposal - Where to look for a profitable trade?

Donald Trump has rejected the European Union's proposal to abolish car tariffs if the US does the same.

Earlier hours, EU Trade Commissioner Cecilia Malmström told the European Parliament's Trade Committee that the EU is "ready to cut car prices by zero, if the US responds with the same."

In response, Trump said the offer was "not good enough," adding that "European consumer habits are to buy their own cars, not the US ones." The US currently applies a 25% tariff for cars and light commercial vehicles and 2.5% for smaller cars. The EU, for its part, imposes a 10% tariff on all passenger cars.

What's next, and can we take advantage of it?

Comparing the Daily Graphs of the three German giants, BMW, Daimler and VW, the latter seems to be best for Short, just after the opening of the European stock market. Let's look in more detail. If, until two weeks ago, the price fluctuated to make a breakthrough on the major long and upward channel, he is now more than sure, given the technique and the foundation. The price is in the mid-term descending channel, with the last adjustment reaching the top of the channel and giving Volkswagen Group a good short positioning position. The resistance zone is also formed by 50SMA combined with 23.6% Fibonacci correction of the main trend. Given the bad foundation, I expect the action to open with a downward glimpse, and in a follow-up test to the closing price of yesterday, it's a good idea to realize our Sell Order.

SL: 151.00

Alternative Scenario: If the price goes back above the resistance zone, it stays there, the negative scenario will be spoiled and more likely to see a rise in the share price.

Source: CNBC

Charts: Used with permission of Bloomberg Finance L.P.

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