CAC 40: French Index Remains Under Pressure

In July, French industrial production slowed from –0.1% to –0.4%, compared with expectations of 0.2%, while the trade deficit reached –6.7 billion euros. At the same time, the current account balance, which reflects the difference between payments received from abroad and payments sent abroad, stood at –4.7 billion euros. This was the second-largest negative reading in the past three years, indicating signs of cooling in the EU’s second-largest economy.

The debt market is reacting actively to the escalation of the Middle East conflict: at this week’s French short-term bill auctions, the yield on three-month securities stood at 2.540%, slightly above the previous 2.533%; the six-month yield rose to 2.720% from 2.655%; and the one-year yield reached 2.940%, compared with 2.860% at the previous auction. Long-term bonds are also moving higher: the yield on 10-year bonds increased from 4.234% at the end of last week to 4.334%, 20-year yields rose from 4.773% to 4.850%, and global 30-year yields climbed from 4.996% to 5.064%.

At present, the index’s top gainers are TotalEnergies SE (+0.59%), Bureau Veritas SA (+0.14%), Engie SA (+0.29%), Eurofins Scientific SE (+0.17%), and EssilorLuxottica SA (+0.09%).

The largest declines were recorded by Kering SA (–4.97%), Capgemini SE (–4.17%), Legrand SA (–3.97%), Compagnie de Saint-Gobain SA (–3.90%), and LVMH Moet Hennessy Louis Vuitton SE (–3.59%).

Support and resistance levels

On the daily chart, the instrument is trading below the support line of a global upward channel with dynamic boundaries of 8800.0–8200.0.

Technical indicators are strengthening the sell signal: the fast EMAs of the Alligator indicator are expanding their fluctuation range, while the AO histogram is forming corrective bars in negative territory.

Support levels: 8110.0, 7900.0.

Resistance levels: 8210.0, 8400.0.

CAC 40 trading scenarios and forecast

Short positions may be opened after the price declines and consolidates below 8110.0, with a target at 7900.0. Stop loss: 8200.0. Implementation period: seven days or more.

Long positions may be opened after the price rises and consolidates above 8210.0, with a target at 8400.0 and a stop loss at 8120.0.