CAC 40 Forecast: Pierces the €7000 Level

• The CAC 40 rallied again during the trading session on Thursday to peer the 7000 level. This is a market that has been very strong for a while, so it’s not a huge surprise that we managed to do that. Paris continues to be one of the leaders in the European Union, and I don’t see that changing anytime soon.
• There is a little bit of psychology at play here, and perhaps people will be cautious on this point. I think that once we get through the next couple of days, we probably have a little bit of a pullback to look at for value, which of course I think a lot of traders will be more than happy to take advantage of.
• With this, I like the idea of buying dips, especially near the €6800 level, an area that had previously been resistant. Because of this, the market has placed itself in a very lofty position but may offer a little bit of value.

Advertisement

Take advantage of today's market opportunities

START TRADING NOW

The 50-Day EMA is closer to the €6600 level, an area that has a certain amount of psychological importance as well. We’ve seen action in that area previously, so would not be surprising at all for it to be important.

Market Likely to Continue to Dip

This is, of course, assuming that we can even get there. I’m not holding my breath for that to happen anytime soon, so at this point, I think we’ve got a situation where the market is more likely than not going to continue to dip occasionally but will be aggressively bought as traders around the world are trying to pick up value stocks, and of course, are under the impression that inflation is coming down, and therefore earnings should pick back up.

It does not mean that we just jump in willy-nilly. We want to look for a little bit of a pullback and a bounce to continue the move higher. In this environment, we could very well see a market that is going to continue to be noisy, but most certainly positive. In fact, it’s not really until we break down below the €6500 level that I would consider shorting the CAC, as it has been such a strong market for so long. Ultimately, I do think that we go much higher over the next several months.

Ready to trade our Forex daily analysis and predictions? Here are the best Forex brokers to choose from.