Summary:
- The French stock market index pulls back after hitting ATH
- FRA40 performed better than DE30 as of late
- Key support for the French index at 5555 points
The French stock market has been doing much better than the German stock market recently. Nevertheless, FRA40 struggles to uphold recent gains. Looking at the daily time frame - D1, one can see that the price clearly reversed after ATH was reached. In the first week of this month, exactly on Wednesday 3 July, we could observe the FRA40 index on the highest level of the year so far. The price stayed there for just a moment before turning lower. However, the downward momentum eased last week and the market began to consolidate. Such a situation may of course be influenced by the enthusiasm in the United States, where stock market indices are at the highest levels in history. However, European indices as an aggregate performed much worse than their US peers, what can be easily seen by looking at the DAX chart. Moving back to the FRA40, the closest support level to watch can be found at 5555 pts handle and unless a break lower occurs, one should not rule out the possibility of price testing ATH in the nearby future.
Source: xStation5
Looking at the lower H4 interval, there is little to worry about. The aforementioned 5555 points handle was being guarded by the bulls throughout the past week. In fact, the index has been trading in an upward trend since the beginning of the year and an even bigger correction may not be enough to halt it. A break below the green trend line could be a strong selling signal, but the index remains far away from this hurdle. However, the latest consolidation may be a little worrying and a failure to break to new highs may trigger to a larger correction. In such a scenario one should focus on the 5555 points handle.
Source: xStation5
Start investing today or test a free demo
Open account Try demo Download mobile app Download mobile app We have mentioned at the beginning of the analysis that the German stock exchange has been doing slightly worse recently. This can be seen when we overlay charts of both instruments on each other. As one can see, the German DAX moved clearly lower last week, while the French FRA40 kept trading within a consolidation range. In case the negative sentiment on the German stock market prevails, other European indices may follow lower. In such a scenario the 5555 pts handle could be at risk.
Source: xStation5
This content has been created by XTB S.A. This service is provided by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, entered in the register of entrepreneurs of the National Court Register (Krajowy Rejestr Sądowy) conducted by District Court for the Capital City of Warsaw, XII Commercial Division of the National Court Register under KRS number 0000217580, REGON number 015803782 and Tax Identification Number (NIP) 527-24-43-955, with the fully paid up share capital in the amount of PLN 5.869.181,75. XTB S.A. conducts brokerage activities on the basis of the license granted by Polish Securities and Exchange Commission on 8th November 2005 No. DDM-M-4021-57-1/2005 and is supervised by Polish Supervision Authority.
