French Equities Track US Higher

 The CAC 40 index futures soared to a fresh four-month pinnacle on Wednesday, fueled by robust performances from Renault (6.31%), WorldLine (5.49%), and Alstom (3.75%). Although facing a minor dip due to TotalEnergies (-1.2%) and Teleperformance (-1.5%), the futures responded optimistically to the softer-than-anticipated US ADP Employment data.  

The ADP Employment Change reported 103K, falling short of the 130K consensus, signalling a tempered labour market. This development strengthened the belief that the Federal Reserve’s rate-hiking era might be over, with expectations of impending rate cuts in the months ahead. While the prevailing sentiment remains positive, the landscape could shift with the release of NFP data on Friday, allowing for potential consolidation in the upcoming session. 


On the 4H chart, a strong ascending channel is present. Resistance at 7,464.0 stood in the way of continuous upside in the prior session but could undergo a retest if support at 7,379.5 keeps the channel formation in play as we advance. 

A breakdown of the support at 7,379.5 could lead to a test of the 25-SMA support at 7,356.0. The 50-SMA (blue line) is not far below, offering additional support at 7,312.5, making psychological support to the potential channel breakdown, where a retracement could be initiated. 

Alternatively, if support at 7,379.5 holds in the upcoming sessions, the futures could move back towards 7,464.0 if the NFP report confirms the dovish sentiment. Higher resistance is established at 7,507.5, presenting a hurdle to the sustainability of the breakout, with higher resistance at 7,543.0 potentially triggering some profit-taking behaviour for a retracement of the rally.  


With the CAC 40 futures trading close to 4-month highs, we could see some consolidation ahead of Friday’s significant US NFP release. Support at 7,379.5 could be a critical level in the upcoming sessions to keep the ascending channel formation in play. 

Sources: Koyfin, Tradingview, Reuters 

Piece written by Tiaan van Aswegen, Trive Financial Market Analyst 

Disclaimer: Trive South Africa (Pty) Ltd, Registration number 2005/011130/07, and an Authorised Financial Services Provider in terms of the Financial Advisory and Intermediary Services Act 2002 (FSP No. 27231). Any analysis/data/opinion contained herein are for informational purposes only and should not be considered advice or a recommendation to invest in any security. The content herein was created using proprietary strategies based on parameters that may include price, time, economic events, liquidity, risk, and macro and cyclical analysis. Securities involve a degree of risk and are volatile instruments. Market and economic conditions are subject to sudden change, which may have a material impact on the outcome of financial instruments and may not be suitable for all investors. When trading or investing in securities or alternative products, the value of the product can increase or decrease meaning your investment can increase or decrease in value. Past performance is not an indication of future performance. Trive South Africa (Pty) Ltd, and its employees assume no liability for any loss or damage (direct, indirect, consequential, or inconsequential) that may be suffered from using or relying on the information contained herein. Please consider the risks involved before you trade or invest.