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The harami candle drawn on Monday will indeed have heralded a consolidation movement, which continued on Tuesday with the return of benchmarks from Wall Street, and which should continue this Wednesday, given the dynamics of futures on clues as the opening approaches. The operators continue to digest the very firm tones of the ECB and the Fed, two powerful central banks which met last week, respectively the Board of Governors and the FOMC. In the absence of sharp statistical benchmarks at the start of the week, traders are already nervously waiting for PMI indicators in flash data for the current month on Friday. The opportunity to refine more precisely the degrees of slowdown of the main economies of the Euro Zone (Germany, France, Italy, Spain).

The CAC 40 index, the three-color flagship index on equities, contracted by 0.27% to 7,294 points.

The market is suffering from fears about the quality of the Chinese economic recovery. “The recovery in China, as we anticipated in our latest projections, lacks momentum with the publication of economic figures very often below expectations over the last 3 months, to the point of requiring the implementation of measures to support from the authorities, such as the lowering of financing rates for banks or even the reduction of bank deposit rates”, notes Alexandre Baradez (IG France). China has just lowered two reference rates in an attempt to support demand.

As for values, Sanofi tried to play the shock absorbers on the CAC 40, with an increase of 3.7% at the close, benefiting from a favorable decision against Boehringer Ingelheim in the context of the Zantac file. Airbus rose by 0.4%, the aeronautical group is leading the race in the showdown with Boeing on orders from airlines at the Paris Air Show. Air India has signed a firm order for 250 Airbus.

On the other side of the Atlantic, the main equity indices ended Tuesday’s session in the red, like the Dow Jones (-0.72% to 34,053 points) or the Nasdaq Composite (-0 .16% at 13,667 points). The S&P500, the benchmark barometer of risk appetite in the eyes of fund managers, fell 0.44% to 4,343 points.

A point on the other risky asset classes: around 08:00 this morning on the foreign exchange market, the single currency was trading at a level close to $1.0910. The barrel of WTI, one of the barometers of risk appetite in the financial markets, was trading around $71.40.

On the agenda this Wednesday, to follow at 4:00 p.m. the first part of the half-yearly hearing of J Powell before the American Parliamentarians.

KEY GRAPHIC ELEMENTS

While the attraction effect of the gap of May 24 (its remainder, in reality) was felt, the CAC came to fail almost exactly on its lower limit on June 14 before falling back before the close. Symmetrically inverse session the next day, showing all the versatility of the market. The flagship index came at the very end of the week to completely fill this gap, without taking advantage of it to further emancipate itself. Moreover, the bearish harami drawn on Monday invites us to maintain a particularly cautious attitude.

FORECAST

In view of the key graphic factors that we have mentioned, our opinion is negative on the CAC 40 index in the short term.

This bearish scenario is valid as long as the CAC 40 index is trading below the resistance at 7410.00 points.

The News Bulletin 247 board

CAC 40
Negative
Resistance(s):
7410.00 / 7500.00 / 7585.00
Medium(s):
7088.00 / 7015.00 / 6885.00

Hourly data chart

Graphic made from the software Prorealtime

Chart in daily data

CAC 40: Powell passes his great oral (© ProRealTime.com)
Graphic made from the software Prorealtime

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