CAC Forecast Today 20/01: Pressure To The Upside (Video)

(MENAFN- Daily Forex)

• The Parisian index has gapped higher again during the trading session on Friday, as we have seen quite a bit of bullish pressure in France, and we were up another full percent for the session.
• At this point, we are setting up for a very interesting set of circumstances near the 7,800 euro level and extending down to the 7,750 euro level where if we can break above that we would kick off a massive turnaround in a market that has been extraordinarily beaten down.

That being said the last couple of weeks have been very good for the CAC 40 index and quite a few others. I believe a lot of this comes down to the idea of the ECB loosening monetary policy, and quite frankly, some things have just gotten that cheap. For a while there, it looked like most European indices were going to zero. Obviously, that was never going to happen, but here we have value hunters pushing the CAC 40 higher.

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The question now is can they break above the crucial 7,800 euros level? If they do, it could send this market right back to the 8,200 euros level. If they fail here, then a revisit of 7,500 euros is a very real possibility. But frankly, this is one of the more intriguing charts that I'm watching at the moment, due to the fact that it is such a obvious level for market participants to pay close attention to a very weak and cheap euro perhaps is making the CAC 40 attractive as Paris sends out a lot of luxury goods and therefore foreigners can buy them. It increases sales, at least that's the theory that I am going with at the moment. There are a lot of moving pieces, but the CAC could be on the verge of a big move here.

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