The entire luxury sector collapsed two weeks ago, and for good reason, Chinese demand is a concern and the sector is highly dependent on it. This concern could be back with President Xi Jinping's announcement that he would like to adjust excessive incomes, which could significantly weaken China's strong incomes and thus cause demand to decline in a sustainable manner. If concrete measures are taken, the downturn in the luxury sector could intensify, which would strongly penalize the CAC40. As long as no concrete measures are taken, the CAC40 manages to recover and could go on to set new records soon
Daily interval :
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Open account Try demo Download mobile app Download mobile appFrom a technical point of view, the ichimoku cloud helped to stop the July 19 decline, allowing to mark point A, the start of a new rise towards new local highs at B. The following decline was stopped by the kijun at 6580 points. After a sideways trend, prices started to rise again and broke the kijun, reinforcing the bullish outlook. If the local high in B is reached, the next target will be the more than 20 year old historical high at 6944 points. If the local high in B is reached, the next target will be the more than 20 year old historical high at 6944 points.Such a bullish move could lead to new all-time highs to define a point D above 7000 points and finalize the bullish wave started in A
FRA40, D1 interval, Source : xStation5
H4 interval :
On an H4 interval, the Ichimoku cloud acted as support, and the signal came when the bearish oblique linking the recent highs was broken after a bullish gap (breakaway gap). The next resistance can be found at 6 800pts. If bulls manage to take price above the aforementioned resistance, the upward trend could extend to the next level at 6 865pts.
FRA40, H4 interval, Source : xStation5
Reda Aboutika, XTB France
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