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CAC Forecast: Looking to Break Higher

  • The Parisian CAC of course did rally during the early hours on Monday, but we also gave back about half of the gains.

CAC Forecast Today - 21/05: Looking to Break Higher (Chart)

Because of this, I think it’s a market that is going to continue to bounce around, trying to build up the necessary momentum to go higher. After all, the European indices all look fairly strong, and at this point in time it’s likely that we will continue to see this market try to carve out some type of bullish flag. If we can break above the €8250 level, then it’s likely that the market could go much higher.

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    Technical Analysis

    Looking at the technical analysis, it’s worth noticing that the Friday candlestick was in fact a hammer, and the fact that we are broken above the top of the candle suggest that you could go looking to the upside. The €8250 level is an area that I think could kick off quite a bit more buying, as “FOMO trading” starts to take front and center. Furthermore, you have to keep in mind that there will be a bit of a “knock on effect” on the CAC from over in Germany, which of course features the DAX that leads the rest the European Union overall. The French index is the second-biggest one, but ultimately this is a situation where you should also be very cognizant of the companies that make up the CAC, which typically are the luxury brands coming out of France, so they do tend to be somewhat sensitive to the value of the euro, so a cross analysis of FX markets is crucial.

    If we were to break down from here, the €8100 level is an area that has shown itself to be very supported. After all, it was significant resistance previously, and therefore I think we have a situation where the CAC continues to be more or less a “buy on the dips” type of scenario. With this, I think it’s probably only a matter of time before we break out to the upside and I remain bullish of Parisian stocks.

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    Christopher Lewis
    About Christopher Lewis

    Christopher Lewis has been trading Forex for several years. He writes about Forex for many online publications, including his own site, aptly named The Trader Guy.

     

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