Current trend

One of the leading indices of the European economy, the CAC 40, is adjusting around 7482.0 against the background of a neutral situation on the stock market: macroeconomic statistics act as support for quotes, and the bond market, on the contrary, exerts pressure.

At the end of last week, the asset's position was supported by August inflation data, according to which the French consumer price index (CPI) added 0.5%, which contributed to a slowdown in the annual rate to 1.8% from 2.3%, and the index harmonized with EU standards fell to 2.2% from 2.7%, which provided significant support to the stock market against the background of a sharp interest rate correction by the European Central Bank (ECB) by -60 basis points.

Auctions for the placement of short-term bills of France took place yesterday: the yield of three-month debt securities amounted to 3.397%, coinciding with the indicator of the previous week, and six-month bills were sold at a rate of 3.227%, down from 3.258%. The bond market continues to adjust, which puts little pressure on the index quotes: the rate on 10-year securities decreased to 2.827% from 2.840%, and on 20-year securities — to 3.209% from 3.215%.

The growth leaders in the index are Unibail-Rodamco-Wetfield SE ( 1.28%), Bouygues SA ( 1.23%), Veolia Environnement VE SA ( 1.14%).

Among the leaders of the decline are STMicroelectronics NV (-3.38%), Dassault Systemes SE (-1.83%), Capgemini SE (-1.55%), Kering SA (-1.51%).

Support and resistance

On the D1 chart, the quotes continue their local correction, having moved away from the resistance line of the descending channel with the boundaries of 7350.0–7100.0 yesterday.

Technical indicators slow down the local sell signal: the fast EMAs on the Alligator indicator remain below the signal line, maintaining a narrow range of fluctuations, and the AO histogram, being near the transition level, continues to form corrective bars.

Support levels: 7430.0, 7110.0.

Resistance levels: 7530.0, 7710.0.

Trading tips

In the event of a reversal and continued growth of the asset, as well as price consolidation above the resistance level of 7530.0, buy positions with a target of 7710.0 and a stop-loss of 7430.0 will be relevant. Implementation period: 7 days and more.

In the event of a reversal and continued decline of the asset, as well as price consolidation below the support level of 7430.0, sell positions with a target of 7110.0 may be opened. Stop-loss – 7530.0.