CAC consolidates near previous highs

CAC consolidates near previous highs
The French CAC index remains one of the strongest in Europe, trading near its all-time highs.
At the time of writing, the index was somewhat lower on the day, changing hands at around 7,200 EUR heading into the US inflation report. 

With a March rate hike now almost a done deal, today’s US CPI could bring more discussion on how many more hikes are coming later this year, as the Fed battles the rising price pressures, the risks of an economic slowdown caused by tighter restrictions, and a decline in consumer confidence.

The support for the index is seen at previous cycle highs near 7,175 EUR. The medium and short-term outlooks seem bullish as long as the CAC trades above it.

However, a bearish breakdown could hit stop-losses of long positions, possibly leading to a decline toward the 50-day moving average (the purple line) near 7,065 EUR.

Alternatively, the resistance for the following days will likely be at the current cycle highs at 7,380 EUR. A breakout above that level would possibly send the CAC toward 7,500 EUR.

Volatility is expected to be elevated after the CPI release, so traders should use a cautious approach when trading. 
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