DAX, CAC and FTSE Forecasts – Euro Area Indices Cautious Heading into Uncertain Weekend

DAX 40 Technical Analysis

The DAX initially rallied on Friday, but it has given back some of the gains that we have seen recently, over the last 24 hours. We also have to look at the bond market in Germany, and it is drifting a little bit lower, so I think this probably has more to do with drifting into the weekend after that huge Thursday candle. That being said, this is a market that I think, given enough time probably finds plenty of support near the 24,000-euro level, assuming that we drop that far.

To the upside, I think we’re aiming for 25,000. Ultimately, this is a market that continues to see the 200-day EMA offer support as well. This is a market that is still in the process of trying to recover from a pretty brutal sell-off at the end of March. I think eventually the German government spending will lift this market.

CAC 40 Technical Analysis

The CAC in Paris has rallied to touch the 8,400-euro level, and it gave back those gains. And now it looks like it’s going to form an exhaustive candle. There is a lot of resistance between 8,400 euros and 8,500 euros, so a pullback makes a certain amount of sense. I think you’ve got a situation where somewhere around the 8,200-euro level it might offer a nice buying opportunity.

Luxuries continue to be a little back and forth, and that has a major influence on what goes on in Paris, but we’ll see how this plays out. I think eventually we break the 8,500-euro level.

FTSE 100 Technical Analysis

The FTSE 100 in London is a little choppy during the trading session, but it looks like it’s going to settle on being basically unchanged. If we can break above the 10,500 level, that not only breaks a resistance level, but it also breaks through a downtrend line. And breaking through that downtrend line could open up a move to the 10,725 level. Short-term pullbacks should see plenty of support near the 10,200 level. And we’ve already seen during the session on Friday, the 50-day EMA offers a little bit of support as well. So I’m not looking to short. I think we’re getting pretty close to a breakout to the upside.