The Parisian index was very noisy during trading on Thursday as we are seeing the 200-day EMA offer a little bit of a resistance barrier.
French yields did drop a bit during the trading session on Thursday, so it does suggest that perhaps we could have a situation where the CAC could rally in that environment.
It's also worth noting that the Wednesday session was well supported as we broke down below the 8,000-euro level only to turn around and form a big hammer. This is an area that I think works out pretty good for the CAC 40 and could open up a move towards the 8,300-euro level.
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If we break down below the lows of the session on Wednesday, meaning the 7,900-euro level, then we could see the CAC drop towards the 7,700-euro level as well as many other European indices falling at the same time. Ultimately, this is a market that I think continues to see a lot of back-and-forth trading in a range like we have been for several weeks now.
Of course, we will have to pay attention to headlines coming out of the Middle East because they have a major influence on whether or not risk appetite returns are risky. If yields start to spike again, I'd be very concerned about any rally in the CAC, but I think ultimately with the massive amount of support and the possibility that yields are going to continue dropping like they did on Thursday, I think that's a good setup. At least at this point in time, we have clear levels to watch when it comes to trading the French index.
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