- The CAC initially fell during the trading session on Tuesday to test the crucial 7,500 euros level.
- This is an area that I think a lot of people will continue to pay attention to as it is a large round psychologically significant figure.
- It is also an area that I think you could pay close attention to as it has shown itself to have a lot of market memory.
After all, it's a resistance barrier that a lot of people are paying close attention to. So, I believe that we are essentially consolidating. We are between the 200-day EMA and the 7,500 euros level, so I think a lot of people are paying close attention. However, it's probably worth noting that just above the 200-day EMA, somewhere near the 7,735 euros level, we have seen a massive amount of resistance.
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If we can break above that level, then we could go look into the 50-day EMA and then possibly the 7900 euros level, which previously was support. Underneath, if we were to break down below the 7,450 euro level, then it's possible that we could break down to the 7,300 euro level.
ECB and Luxury Brands
The ECB is loose with its monetary policy, and I think that will help the CAC eventually. But right now, it looks like we are just simply killing time during the summer. That's pretty usual for this time of year and I don't necessarily think that it means anything other than we are bouncing around killing time. Paris of course tends to benefit from luxury brands, but we've recently seen a lot of noise due to elections in the financial district. Whether or not that actually changes anything remains to be seen but right now I think we are trying to build a base and we'll trade the breakout for at least a good 100 euros. This is a very real possibility, but at this point in time it looks like we are trying to guesstimate what happens in the Parliament going forward in France.
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