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The rebound attempt initiated on Friday ultimately did not hold, the CAC having yesterday drawn a significant bearish enclosing candle in relation to the star doji from the day before, losing 0.35% to 7,252 points. The pre-opening data suggests a start to the session in the red this Wednesday, with the approach of two major meetings: the consumer price indices in the United States this Wednesday at 2:30 p.m. and the outcome tomorrow of a Council of Governors of the European Central Bank.
“Recent declarations from some of its members indeed allow for a certain uncertainty to be maintained before the monthly meeting of the Governing Council on Thursday. In any case, the decision will not be taken, barring a completely unexpected scenario. , unanimously.”, warns Julien Russo, senior portfolio manager, Money Markets, at Swiss Life Asset Managers France, who thinks that “the key rates should then remain on a “plateau” for many months, a plateau which could continue throughout 2024. The decline in tensions on the American labor market and the deterioration of the economic situation in the euro zone, with in particular the fear of a recession in Germany, call for a pause in the increase in At the same time, the persistence of high underlying inflation should push the ECB not to lower its key rates for a longer period than expected.”
Less higher, more longer… This is also what Alexandre Baradez (IG France) thinks for the Fed which will complete its Monetary Policy Committee (FOMC) next week. “This is normally where the Fed should place more emphasis on the “longer” than on the “higher” because the rate increases carried out will continue to produce their restrictive effects on the economy even if it has appeared very resilient in recent months. Signs of slowdown are starting to appear, without forgetting that the complicated situation in China and the economic weakness of Europe could also weigh on American activity in the months to come,” continued the analyst.
In terms of statistics on Tuesday, the ZEW confidence in the German economy rose slightly. From -12.3 last month, the score rose to -11.4, compared to pessimistic expectations of -15. Professor Achim Wambach provided the following insights, following the disclosure of the score of -11.4 this month: “This development puts into perspective the slight improvement in expectations regarding Germany’s economic situation over the next six months. Germany’s brighter economic outlook aligns with a significantly more optimistic view of developments in international stock markets. This is due, at least in part, to the growing proportion of respondents who expect stable interest rates in the Eurozone and the United States. In addition, experts expect further easing of China’s interest rate policy.”
On the value side, L’Oréal lost 1.44%, suffering from a downgrade in sales from Deutsche Bank which is worried about the slowdown in China. On the broader SBF 120 index, SES-imagotag jumped again (+12.2%), while investors appreciated the strong progression in the half-year results of the electronic label specialist. OSE Immunotherapeutics soared more than 60% after announcing positive data for its vaccine against advanced lung cancer.
On the other side of the Atlantic, the main equity indices ended Tuesday’s session in the red, mainly on the technological side of the stock. The Nasdaq Composite lost 1.04% to 13,773 points, due to the air gap experienced by Apple, after its traditional back-to-school keynote. The Dow Jones remained almost stable (-0.05% at 34,645 points). The S&P500, the benchmark barometer of risk appetite in the eyes of fund managers, lost 0.57% to 4,461 points.
An update on other risky asset classes: around 8 a.m. this morning on the foreign exchange market, the single currency was trading at a level close to $1.0740. The barrel of WTI, one of the barometers of the appetite for risk on the financial markets, was trading around $88.50.
On the agenda this Wednesday, to follow as a priority the consumer price indices in the United States at 2:30 p.m. (August).
KEY GRAPHIC ELEMENTS
A directional change is imminent!
From August 10 to 18, in one go, the tricolor flagship index melted from one terminal to the other of the vast flattened diamond (diamond) which has concentrated its nervous oscillations since May 24, breaking in the process the line d neckline of a bearish chartist pattern at 7,250 points.
A continuation of the oscillations within the diamond is envisaged. Any release from the latter will give direction provided that the volumes, and a sectoral federation, are there…
Signs of fatigue within this diamond itself are already perceptible. The bearish all-encompassing of August 24, with a response on September 4, at the level of the median line of the diamond, constitute one. Another is the weekly candle structure for the week ended September 1st. The failure against the upper limit of the large diamond is validated.
To summarize, it is the direction of exit from this figure of congestion which will be fundamental, and will ultimately provide a lasting direction.
FORECAST
Considering the key graphical 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 below resistance at 7324.00 points.
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