FRA40 pulls back as investors continue to follow the banking turmoil

3:26 PM 28 March 2023

FRA40 and other major European indices gave back most of early gains in the afternoon amid renewed concerns over the European banking sector. French prosecutors raided five banks including Societe Generale, BNP Paribas and HSBC as part of an investigation into suspected cases of tax fraud and money laundering related to dividend payments. Meanwhile, protests against the pension reform continue and strikes entered a 10th day on Tuesday, with public transport disrupted and deliveries halted. From a technical point of view, the French index pulled back as buyers failed to break above 50 SMA (green line) around 7180 pts. If sellers manage to uphold control, downward move may deepen towards upward trendline or even crucial support zone in the region 6550 pts - 6650 pts, which is marked with lower limit of the 1:1 structure, 200 SMA (red line) and 23.6% Fibonacci retracement of the upward wave launched in March 2020. 

FRA40, D1 interval. Source: xStation5

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