CAC 40 Index Forecast October 18, 2012, Technical Analysis

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By FX Empire Analyst - Christopher Lewis
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Parisian stocks did extraordinarily well during the session on Wednesday as the market broke above the 3500 level. Paris saw massive buying upon speculation of a potential Spanish bailout, which of course would move all risk assets in the European area higher.

Looking forward, we see the €3600 level as a bit of resistance, but with the recent action, and would not surprise us to see this market go much higher. Look for headlines out of Madrid and not Paris to dictate where this market goes over the long term. If the Spanish to ask for the bailout, this market should continue to gain quite rapidly as many French banks are knee-deep in Spanish debt. As long as is market is bullish, buying French banks is probably one of the stronger trade you can make.

 

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