The broad rally in EU and US stocks continued on Tuesday, pushing EU indices 2% higher during the London session.
Earlier today, the CAC has already climbed above the 50-day moving average (the purple line) and as long as it trades above it, the short-term outlook seems bullish. Additionally, the price has also jumped above the stronger selling zone in the 6,650 EUR area, likely confirming the bullish momentum.
The current resistance is at the mentioned 200-day average near 6,780 EUR (the green line). If the price jumps above it, the medium-term outlook could change back to bullish.
The MACD indicator is also about to send a bullish signal, perhaps confirming the upward trajectory, although it is often perceived as a delayed indicator.
Sentiment slightly improved today after the Financial Times reported that Russia would no longer demand Ukraine be "denazified" in the upcoming negotiations.
"The resilience of global stocks given the cocktail of risks facing the global economy is truly impressive, but this stoicism is likely to face continuing tests as the impact of mounting prices, and the actions of central banks continue to feed through, not to mention the ongoing geopolitical concerns.” Russ Mould, investment director at AJ Bell, said today.