CAC 40: the Parisian index is approaching a major support at 5800 points

The CAC 40 is approaching a major support at 5800 points

The Paris Stock Exchange continues to be under pressure, like its international counterparts, in the wake of tougher rhetoric from central banks and growing fears of recession on both sides of the Atlantic. The Fed, ECB and other central banks have further tightened their stance on inflation and promised an acceleration of monetary tightening, while recent economic data has largely disappointed and reinforced recession fears, as evidenced by the GDPNow model. from the Atlanta Fed, which now considers US growth to be nil in the second quarter.

The CAC 40 has fallen around 10% since its peak on June 6, but the bearish momentum seems to be running out of steam as the Paris stock market returns close to a major support at around 5800 points on which it had rebounded in early March, at the start of the Russian invasion in Ukraine.

From a technical analysis perspective, the RSI momentum indicator is forming a bullish divergence on the 4-hour time frame as the CAC 40 approaches its support. This is a configuration that could precede a rebound, but it will be better to wait for the start of a rebound, above the high of the week at around 6080 points, to implement bullish strategies.

4-hour chart of the CAC 40 price – key levels

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