The CAC 40 is set to open lower as France considers extending lockdowns as the number of cases continues to rise. The index, which tracks the biggest 40 companies in France is down by about 0.20% in the futures market. That’s after it rose by 0.18% yesterday.
In a statement this week, Jerome Salomon, the director general of health, said that the country would endure further lockdowns in the near future. Yesterday, the country reported more than 13,000 new cases.
The CAC 40 is also struggling because of the rising possibility of a no-deal Brexit. That’s after talks between Boris Johnson and EU’s Ursula Leyen ended without a deal. A no-deal Brexit would be negative for France and companies in the CAC index. That’s because the country exported goods worth billions of dollars every year to the UK. Among the top exporters are Sanofi, Total, Christian Dior, and Schneider Electric.
On the other hand, there are positive signs that the EU will reach budget deal today. That’s after the Hungarian and Polish prime ministers issued positive remarks yesterday. A deal would be a good thing for CAC 40 and other European indices like DAX and Stoxx 50.
Elsewhere, in Asia, the Hang Seng and Nikkei 225 indices ended their sessions lower while in the US, futures tied to the Dow Jones and S&P 500 are also falling.
In the economic calendar, the main events to watch will be the Swedish and the US inflation data and mining production from South Africa. For agricultural commodity traders, the United States Department of Agriculture (USDA) will release the monthly WASDE report.
CAC 40 technical outlook
The CAC 40 index is trading at €5540, where it has been oscillating recently. On the four-hour chart, we see that the price is below €5,620, where it formed a double-top pattern.
It is also slightly above the important support at €5,490. Therefore, for today, I don’t expect any much movements of the index. However, in the near term, I predict that it will break-out above the resistance at €5,620.
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CAC 40 technical chart
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