- So, the French index fell after gapping lower on Monday, as we have seen quite a bit of negativity when it comes to all things European, but especially France, as a snap election has been called for parliament after Emmanuel Macron was, absolutely gutted after the massive right-wing gains in the European Union Parliament election.
Because of this, there is a certain amount of uncertainty in France, and this could present an opportunity. There are a couple of ways to look at this chart, one of which is that we have fallen so hard and started to bounce so much that I think a daily close above 7,900 euros might be a signal that the market is going to recover and realize that life doesn't end just because there's a new election. On the other hand, you can see that there is a big double top pattern which measures for a move to roughly 7,600 euros, an area that has been important multiple times in the past. So that could be a buying opportunity.
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Not a Market to Short Anytime Soon.
I don't have any shorting opportunity in this analysis, at least not yet. And that's because despite the fact that we've had a little bit of a panic during the session, the reality is we are still very much in an uptrend and the ECB is going to start cutting rates, thereby making stocks a little bit more attractive.
The Euro fell in value during the day as well. And that makes these French luxury goods, which are the bulk of the companies affordable around the world, or at least more affordable. So all things being equal, I do believe this ends up being a buying opportunity here, but the question is, can we break back above 7,900 and take that trade or do we need to go a little lower, perhaps looking closer to 7,600? At this point, value is something that you need to keep an eye out for. Value will continue to be the most important aspect of the markets in general, and Paris will be no different.
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