CAC 40 Under Stress as France Struggles to Contain the Virus

Markets have digested the realization that the rollout of this vaccine campaign does imply a direct remedy to the current economic and social problems, resulting in a small volatile week as risk appetite was undecided.

CAC 40 Under Stress as France Struggles to Contain the Virus

In recent days we've seen many countries needing to impose tighter restrictions to attempt to stop the continuing rapid spread of Covid-19. France is one of these, as the government has imposed a strict curfew because the number of daily diseases continues to rise, with the seven-day moving average now above 20,000 despite restrictions being in place since early December.

Europe is facing a really"serious situation" overall warned that the President of the European Commission, and many economists believe that a double-dip recession is now inevitable in the Eurozone as the end of restrictions appears farther away than ever, penalizing the prognosis for the present economic slump.

The CAC 40 has begun the week a little softer and is threatening to fall under 5,550 as sellers appear to have the upper hand. Positive sentiment in the midst of last week saw the French indicator endeavor to 5,670 but had been refused and sent back down to complete the week bordering the 5,500 line. Momentum indicators are providing mixed signals as the moving averages a positioned in bullish order, but the stochastic and MACD appear to signal there is additional room to fall before oversold conditions appear.

For the time being, the 76.4percent Fibonacci (5,495) remains as strong short-term aid, having held most of the bearish pressure since mid-November. Further downside would likely see some buyer resistance at the 5,400 mark but it isn't until 5,310 that strong service can be seen. On the topside, 5,628 continues to offer significant resistance followed by 5,720 where current highs have been rejected.

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