DAX, CAC and MIB Forecasts – European Rates Continue to Stay Strong

DAX Technical Analysis

The German DAX initially fell during trading on Monday, although it must be said it has recovered quite nicely. It looks like the 24,400 level will continue to be an area of somewhat important resistance. If we can break above there, then I think you have a real shot at this market trying to take off towards the 24,800 level.

Short-term pullbacks continue to be buying opportunities, but keep in mind that the 10-year yield in Germany is still above 3%, and it’s showing no real signs of capitulating, so probably tough sledding here.

CAC 40 Technical Analysis

In France, we’ve had the CAC 40 fall pretty significantly down to the 8,000 level. It is starting to see a little support there. French yields are still elevated at 3.71%. This is an area at 8,000 that previously had been support and resistance, so a little bit of a dogfight here would be expected.

Watch the luxury sector; that will be a major driver of where France goes. Lower rates could help that, so it could turbocharge the CAC, but we’ll have to wait and see. Right now, it’s probably more or less going to be consolidation as well.

FTSE MIB Technical Analysis

Finally, in Italy, we have the MIB showing signs of turning around after initially drifting lower during the session. Rates here are just under 3.9%, but that helps the financial system as the rate play comes into the picture.

The 47,000-level underneath will be a floor from everything I see, and of course, we have the 50-day EMA race toward it. Out of the three indices, I believe that Italy continues to be the biggest bright spot, so watch this one; it will probably front run the others.