CAC 40: THE PRICE IS MOVING TOWARDS THE RESISTANCE LINE OF THE ASCENDING CHANNEL 8300.0–7830.0

Current trend

One of the leading indices of the European economy, CAC 40, is correcting around 8165.0 against ambiguous macroeconomic reports and the situation on the bond market.

The French manufacturing PMI in March decreased from 47.1 points to 45.8 points, the services PMI – from 48.4 points to 47.8 points, and the composite PMI from S&P Global – from 48.1 points to 47.7 points. On the other hand, the number of registered cars in the country in February adjusted from –32.4% to 16.6%, which contributed to the acceleration from 9.2% to 13.0% YoY.

The prices are being put under pressure by a correction in the domestic bond market: popular 10-year securities are trading at a rate of 2.845%, down from 2.895% at the beginning of the week, and global 20-year bonds are trading at 3.223%, down from 3.295% on Monday.

At the moment, the growth leaders in the index are Alstom SA ( 3.28%), Teleperformance SE ( 2.48%), and Unibail-Rodamco-Westfield SE ( 1.92%).

Among the securities showing a decline are Capgemini SE (–2.66%), Orange SA (–1.20%), Compagnie Generale des Etablissements Michelin SCA (–1.17%), and Kering SA (–1.04%).

Support and resistance

On the daily chart, the trading instrument is growing towards the resistance line of the ascending channel with dynamic boundaries of 8300.0–7830.0.

Technical indicators are holding a buy signal: fast EMA on the Alligator indicator are above the signal line, and the AO histogram is forming corrective bars above the transition level.

Resistance levels: 8220.0, 8440.0.

Support levels: 8100.0, 7900.0.

Trading tips

Long positions may be opened after the price rises and consolidates above 8220.0, with the target at 8440.0 and stop loss 8150.0. Implementation period: 7 days or more.

Short positions may be opened after the price declines and consolidates below 8100.0, with the target at 7900.0. Stop loss – 8200.0.