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Hugo in HTO Trading,

CAC40: Still holding at a weekly support

Last week the French Finance Minister said economic growth will accelerate in 2016 and the government will meet its pledges to reduce the Country’s budget deficit to 3.3% in 2016 and below 3% in 2017 from an expected 3.8% this year.

In August 2015, the Consumer Price Index (CPI) picked up 0.3% after a decrease by 0.4% in July. Seasonally adjusted, it fell back by 0.1% in August compared with July. Year-on-year, it remained stable, after a rise by 0.2% in July.

The Index fell 0.17% since the start of the month and rose 6.5% year to date and is in consolidating a well-defined distribution phase. Last week, CAC40 initially rose but found again enough resistance at the 50-week moving average giving back all its gains and closed in the red near the open of the week, with a narrow range. The stochastic is showing a bearish momentum and is below the 50 mid line.

Expecting a downward move to a key level at 4,225 on a break below previous week low at 4,483 (scenario 1) or a break above previous week high at 4,700.5 may push upward the Index to a weekly resistance at 4,975 (scenario 2).

Fra40 is a CFD written over CAC40 futures.