France GDP Growth Expands as Expected CAC Recovers from Week’s Low

The final GDP Growth for France released today showed the economy for Q1 expanded slightly from 0.8% previously to 1.1% YoY as expected.

The small expansion gave some relief to a stock market concerned more about the timing of the next Fed rate cut than anything else. The week’s low was touched yesterday before the session closed in the green.

The stock market has had a tough week as sentiment has shifted to a possible delay in the pivot-point which would be the start of a string of interest rate cuts. Fed monetary policy easing would potentially lead the way for the ECB to continue easing after its expected cut in June.

Later today we will get inflation data for the Eurozone and PCE data from the US. Inflation in the Eurozone is expected to rise from 2.7% to 2.8% YoY, which wouldn’t be a positive for the ECB’s capability of easing after June unless future data shows a decline.

The PCE Price Index YoY is expected to be flat on last month’s reading of 2.8%, which might help in turning the Fed’s stance on interest rates to a more dovish view. However, various Fed officials have openly stated recently that rates may be high for longer without strong data showing a sufficient decline in price pressure.

Technical View

The day chart below for the CAC shows a market in a wide range. The range started during the consolidation period at the end of February and beginning of March. And the double top, point A and B, created the topside of the range.

Yesterday’s candle bounced off the support of the Ichimoku cloud, which also coincided with the support from the consolidation in March. The market is now in the cloud, considered no-man’s land and immediate support and resistance will be the bottom and top sides of the cloud.

To establish the next trend, we have to wait for a clear breakout of the range. That is a close above the all-time high of 8,261 or a close below the recent low of 7,852.

ABOUT THE AUTHOR See More

Gino Bruno D'Alessio

Gino D’Alessio is a professional Forex trader with 20+ years of experience in the financial markets as a broker-dealer. Having worked in New York and London, Gino is regularly featured on Seeking Alpha. He completed the CAIA program in 2015, which also gave great insight into global macro factors. His main focus is FX majors, indices and commodities.

Related Articles

Forex Signals Brief May 12: Markets Focus on US Inflation and Trade Deals This Week

4 days ago

Save

Trump’s Chip Comments Lift NVDA Stock — More Upside Ahead for Nvidia?

1 week ago

Save

Forex Signals Brief April 8: Coinbase and Shopify Earnings Close the Season

1 week ago

Save

Comments

Leave a Reply Cancel reply

You must be logged in to post a comment.