Macro: Sandcastle economics
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Technical Update - CAC40, AEX25, BEL20, SMI20 & ITALY40
Kim Cramer Larsson
Technical Analyst, Saxo Bank Group
CAC40/FRA40cfd is trading very similar to DAX with the Index hovering around the 0.618 Fibonacci retracement level. Do gain further upside CAC needs to break above 6,680. That would most likely lead to a test of the 200 daily Simple Moving Average (SMA) just below 6,800 and a possible test of the Neckline of the Shoulder-Head -Shoulder pattern.
However, current resistance could be too strong , RSI (Strength Indicator) is still below 60 threshold i.e. still in bearish sentiment. A break below 6,460 will most likely lead to bear trend to resume.
Contrary to DAX and CAC40, AEX25/NETH25cfd seems to be struggling bouncing much above the 0.382 retracement. Will it reach 0.50 retracement? Jury’s still out though. However, RSI below 60 i.e bearish sentiment and if AEX drops back below 700 the bear trend is likely to resume
BEL20 has bounced stronger than most other European markets. Above 0.764 retracement and close to the strong resistance at around 4,155. RSI is flirting with the 60 bull/bear threshold but is likely to be rejected. If BEL20 closes the gap between two dashed lines bear trend is to resume.
SMI20/SWISS20 cfd is trading above 0.764 retracement around both the 200 and 55 SMA. Strong resistance at 12,422.
If RSI cannot close above 60 threshold bears are likely to regain control.
Italy40cfd is trading around 0.50 retracement trying to push higher. Some resistance at 25,065 and strong resistance at around 26K. If the Index trades below 23,821 bears are likely to regain control sending the Index towards previous lows.
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