CAC Drops to 200-Day Average

At the time of writing, the index was trading at 6,760 EUR, testing its 200-day moving average. 

If that level is taken out to the downside, stop-losses of long positions could be hit, likely sending the index further lower. In that case, the next target for bears could be at January lows near 6,700 EUR, with another level to watch at 6,630 EUR.

Positive sentiment during the Asian session failed to hold during London trading hours, and the brief rally in risk assets quickly faded. 

However, if dip buyers reemerge during the US session, the initial resistance could be found at 6,340 EUR.

It looks like rising inflation globally, soaring US yields, hawkish Fed, and possibly ECB, along with the geopolitical conflict in Eastern Europe, could be too much for equity bulls, likely dragging EU and US stocks lower over the following days. 

US president Joe Biden and Russian president Vladimir Putin spoke on the weekend as the tensions grow to a crescendo and the call has been regarded as a last-ditch effort to fend off a Russian invasion of Ukraine. However, there was no solace found here given that there was “no fundamental change” to the worsening crisis according to a senior US official