FRA40 hovers around record high

4:25 PM March 6, 2023

French CAC40 index is trading 0.4% higher on Monday around fresh all-time high, boosted by gains in luxury stocks such as LVMH (MC.FR) , Kering (KER.FR) and Hermes (RMS.FR) as traders digested fresh comments from ECB chief economist Lane, who pointed out that rates should raise not only in March but also in May. On the data front, S&P Global France Construction PMI dropped to 45.2 in February from 48.4 in January, which was a ninth straight monthly decline of the French construction sector. Upward move is rather limited as markets brace themselves for tomorrow’s highly-anticipated FED Chair Powell's testimony and the February NFP data on Friday. 

From a technical point of view, the FRA40 rose over 30.0% from September lows and is currently testing record high at 7400 pts, however hidden bearish divergence appeared on the Momentum indicator, which indicates that the recent upward rally may be losing steam. If sellers manage to regain control, downward impulse may be launched towards support at 6515 pts which coincides with 23.6% Fibonacci retracement of the upward wave launched in March 2020.

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FRA40, W1 interval. Source: xStation5

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