It's been a long time since we've discussed the European indices. I was looking at the French stock market index CAC, also referred to as the FRA40. It's trading with a massive bullish trend at $5250.80 before the release of the ECB policy decision.
To me, the solid gains at the beginning on European session, are a clear indication that investors are trading sentiments. As we know, the ECB isn't expected to surprise us with a rate hike. That's why investors are increasing their bets in European stocks. The near zero interest rate helps European companies borrow at the cheapest cost and pay more dividend, the share of the profit.
CAC – 4-Hour Chart – Trendline Resistance
As of now, the CAC index is facing an immediate resistance at $5256. If it breaks above this level, we may find it somewhere near $5275.
CAC Trade Idea
For CAC, entering a sell position below $5256 with a stop above $5250 and a target of $5225 seems like a good trading plan. Although, it's better to wait for ECB release at 11:45 (GMT).
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