CAC 40 Forecast Today 16/12: Struggles Near 7,400 (Video)


(MENAFN- Daily Forex)

  • The Parisian index initially tried to rally a bit during the trading session on Friday, but then turned around to show signs of weakness yet again, as we are hanging around an area that has been noisy.
  • The 7,400 euros level is an area that over the last couple of days has attracted some attention.
  • It's probably worth noting that the 50-day EMA is just below, and the 200-day EMA is just above, so I think in this general vicinity we would see a lot of technical noise.

If we were to turn around and break down below the 7,350 euros level, then the CAC will more likely than not continue its overall negativity. This is a market that I think has a lot of headwinds ahead of it, as there is so much in the way of political and economic negativity in the country.

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The relative strength index isn't in an overbought condition. So maybe we want to wait to start shorting, but right now I don't have any interest whatsoever in trying to buy the market. In fact, we would need to break above the 7,600 euro level to even have that conversation. It is worth noting that the French economy is doing quite poorly.

At this point in time, this bounce probably has been a selling opportunity. We just don't have the technical setup at the same time. I prefer the DAX in Germany. And for those of you who do pairs trading, may have found going long Germany, going short, France is the path going forward. I do think that if the stock markets were to both go higher, at the end of the day, Germany will still outperform France going forward. I will continue to watch this market very closely.

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