Current trend

One of the leading indices of the European economy, the CAC 40, is correcting at 7748.0, supported by macroeconomic statistics.

Thus, the September inflation report recorded a decline in the Consumer Price Index in France from 0.5% to –1.2% against a forecast of –0.7%, which contributed to a slowdown in the annual growth rate from 1.8% to 1.2% against preliminary estimates of 1.6%. The index harmonized with EU standards increased by 1.5% year-on-year in September, and expenditure — by 0.2% in August, which provides significant support to the market against the backdrop of the “dovish” stance of the European Central Bank (ECB) launched last week, allowing monetary authorities to continue easing monetary policy at subsequent meetings.

Yields across the French bond portfolio are rising slightly, keeping the index from a more rapid upward trend: the 10-year bonds rate rose to 2.971% from 2.940%, the 20-year bonds rate — to 3.385% from 3.355%, and the 30-year bonds rate — to 3.609% from 3.559%.

The growth leaders in the index are LVMH Moet Hennessy Louis Vuitton SE ( 9.88%), Kering SA ( 9.61%), Hermes International SCA ( 9.10%).

Among the leaders of the decline are Teleperformance SE (–4.68%), Thales (–2.49%), TotalEnergies SE (–2.32%), Orange SA (–1.69%).

Support and resistance

On the daily chart, quotes have moved away from the resistance line of the descending channel with boundaries of 7350.0–7100.0.

Technical indicators strengthen the local buy signal: fast EMAs on the Alligator indicator remain above the signal line, maintaining a narrow range of fluctuations, and the AO histogram, being close to the transition level, continues to form ascending bars.

Support levels: 7700.0, 7430.0.

Resistance levels: 7810.0, 8040.0.

Trading tips

In case of a reversal and continued growth of the asset, as well as consolidation of the price above the resistance level of 7810.0, long positions with a target of 8040.0 and a stop-loss of 7730.0 will be relevant. Implementation period: 7 days or more.

In case of a reversal and continuation of the decline, as well as consolidation of the price below the support level of 7700.0, short positions with a target of 7430.0 will be relevant. Stop loss — 7800.0.