CAC Forecast Today 09/7: Continues Consolidation (Video)
(MENAFN- Daily Forex)
In my daily CAC 40 analysis, I cannot help but notice that the 200-day EMA is an indicator that a lot of people are paying attention to, right around the crucial 7,700 euros level. By giving back the gains the way we have, it does suggest that we are not ready to go higher, but that doesn't mean that we are going to rise right away, perhaps allowing us to take some time to pick up a bit of value.
We have been consolidating for a little while now, so it does make a certain amount of sense that we build up pressure and then eventually break out or possibly even break down. But right now, we just aren't ready to make that decision. For what it is worth, I guess in the longer term, I am a bit bullish on the CAC, but that is only if we can finally get some momentum.
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The Breakout Needed
We need a daily close above the 7,700 euros level to really drive the point home right now. And as such, I think we're going to continue the overall consolidation. It's probably worth noting that the 7,500 euros level underneath is an area that's offered a lot of support. And I think that probably continues to be the case, but we'll just have to wait and see.
Buying on the dips would be my strategy at this point, but I would not put a ton of money in the Parisian index, just like I wouldn't put a ton of money in any other non-US index at the moment. There are a lot of concerns in France and the rest of the European Union as to exactly what the next political landscape looks like.
But really at this point in time, a cheaper euro might help exports in the luxury goods sector, which is most of what the CAC 40 is. So, keep that in mind. If we break out to the upside, the next target could be the 7900 euros level, but if we break down the low support, then we'll probably have to challenge the 7300 euros level.
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