fbFR40 Forecast | Better than expected French data bullish for FR40 | IFCM

Technical Analysis FR40 : 2020-07-08

Recommendation for CAC 40:

Buy
Strong SellSellNeutralBuyStrong Buy

Above 5120.47

Buy Stop

Below 4793.80

Stop Loss

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Senior Analytical Expert
Articles 1571
IndicatorValueSignal
RSI Neutral
MACD Sell
Donchian Channel Neutral
MA(50) Buy
Fractals Neutral
Parabolic SAR Buy

Chart Analysis

IFC Markets Tech Analysis

On the daily timeframe FR40: D1 has breached out from a consolidation triangle above the 50-day moving average MA(50) which is rising. We believe the bullish momentum will continue after the price breaches above the upper Donchian boundary at 5120.47. This level can be used as an entry point for placing a pending order to buy. The stop loss can be placed below 4793.80. After placing the pending order the stop loss is to be moved every day to the next fractal low, following Parabolic signals. Thus, we are changing the expected profit/loss ratio to the breakeven point. If the price meets the stop-loss level (4793.80) without reaching the order (5120.47) we recommend cancelling the order: the market sustains internal changes which were not taken into account.

Fundamental Analysis

France’s private business sector contraction halted. Will the FR40 rebound continue?

French economic data in the last couple of weeks were positive on balance. According to Markit, France’s Manufacturing PMI increased to 52.3 in June of 2020 from 40.6 in May, better than market expectations of 52.1. And Services PMI increased to 50.7 in June from 31.1 in May, when a reading of 50.3 was expected. Readings above 50 indicate activities expansion, below indicate contraction. So the contraction in private business sector halted and an expansion was achieved. Better data are bullish for FR40. At the same time deficits of both trade balance and current account widened in May when a narrowing was expected. Deterioration of France’s economic performance is a downside risk for stock market index.

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