CAC, STOXX 50, Platinum and USD/HUF Forecasts – Risk Appetite Looks for an Outlet

CAC 40 Technical Analysis

The first chart in front of you is the Parisian CAC, and you can see that the Parisian stock market has been a bit sluggish during the day on Friday. I’m actually watching this less for right this moment and more for what we’re going to have next week. As things stand right now, we are stabilizing, but if we can clear the 50-day EMA at the €8,163 level, I think you have a real shot at this market turning around and jumping to €8,275 and eventually the €8,400 level.

If we do pull back, there is plenty of support at the 200-day EMA just under the €8,000 level. Part of the problem that we’ve seen in Paris has been weakness from luxury brands, which, of course, is the first thing you think of with the CAC, but there has been a little bit of action in the defensive stocks, such as Thales, which has performed fairly well.

Euro Stoxx 50 Technical Analysis

The Euro Stoxx 50 looks like it is kind of just hanging around at the moment, which does make a certain amount of sense because we’ve had a nice bounce from a technically important area in the form of €5,800. The 50-day EMA sits there as well, and of course, some of this comes down to concerns about trade, although that’s probably starting to take a bit of a back seat at the moment.

Remember, Euro Stoxx is basically Germany and France and a handful of other larger, maybe Dutch companies. It gives you a good read on all of Europe and for me, this looks like a buy on the dip opportunity is starting to form. €6,000 is a bit of a psychological barrier; it does make a bit of sense that we are perhaps struggling to recapture that level, but I would anticipate that if we continue to see good signs of trade cooperation, it’s only a matter of time before we are above that.

Platinum Technical Analysis

If you were watching yesterday, you saw me talk about platinum. Silver has taken off, but it is struggling with the idea of $100 an ounce. On the other hand, platinum doesn’t care. Platinum is grinding higher, and it has broken out, and there could be a somewhat implied move to the $3,200 level given enough time. I don’t think that happens overnight, but platinum certainly seems to be following the same trajectory as other metals, and that will continue to be the case going forward.

Platinum is a big winner in my estimation, as silver, of course, has taken a lot of the headlines. This is a backdoor way to play the same problems. Short-term pullbacks offer buying opportunities, and I do think platinum finds its way to $3,200 eventually. Obviously, there’s some psychology between here and there, think $3,000, but if silver goes parabolic, platinum will be dragged right along with it.

USD/HUF Technical Analysis

Finally, I have a bit of an exotic pair that I’m watching here. This is the US dollar against the Hungarian forint. If you’ve been watching me, you’ll notice I spend a lot of time watching these smaller currencies. That’s because that’s where the real money is in Forex. If you ever wondered how to make true money in Forex, it’s through these smaller markets.

The US dollar has rallied a touch against the Hungarian forint, but notice we are already starting to give back some of those gains. So, the question then becomes, what are we about to do? It looks to me like we are going to drop to the 307 level. Currently, we are trading at about 325.6. The interest rate differential does favor Hungary and therefore, I think it makes quite a bit of sense that we would continue to see money flow against the US dollar into the Hungarian forint as its overnight rate is 6.5% and the US overnight rate is 3.75%.

This is a simple carry trade type of play that, fading short-term rallies, which it looks like we’re already starting to do, makes for a nice trading opportunity. Anything above the 50-day EMA and most certainly the 333 level, then you have to ask questions of maybe there’s a deeper pullback coming, but right now, this one looks like steady as she goes to the downside.

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