France 40 Technical Analysis | France 40 Trading: 2019-08-05 | IFCM India
IFC Markets Online CFD Broker

France 40 Technical Analysis - France 40 Trading: 2019-08-05

New US sanctions against China caused the fall of global stock markets

The French industrial PMI dropped in July. Will the decline of FR40 quotations continue?

The French macroeconomic indicator Markit Manufacturing PMI in July this year dropped to 49.7 points. This is worse than a preliminary forecast of 50 points. In general, the global stock markets are experiencing a decrease in quotations against the background of another exacerbation of the US-Chinese trade war. US President Donald Trump announced a duty increase of 10% from September 1, 2019 on imports of Chinese goods worth $ 300 billion a year. The fall of the FR40 index last week was the maximum since October 2018. The current P / E level (capitalization / total net profit for the year) of the index is 17.5. He is now 13.3% higher than the level at the beginning of 2019.

FR40

On the daily timeframe FR40: D1 broke through the support line of the medium-term uptrend. A number of technical analysis indicators formed signals for lowering. A further drop in quotations is possible in case of worsening trade wars and their negative impact on the world and French economies.

  • The Parabolic indicator gives a downtrend signal.
  • The Bolinger bands widened, indicating a volatility increase. Both lines slope down.
  • The RSI indicator is below 30. It formed a divergence towards to fall.
  • The MACD indicator gives a bearish signal.

The bearish momentum may develop if FR40 drops below its last low: 5350. This level can be used as an entry point. The initial stop lose may be set higher than the last upper fractal, the maximum since December 2007, the upper Bollinger line and the Parabolic signal: 5680. After opening the pending order, stop shall be moved following the Bollinger and Parabolic signals to the next fractal minimum. Thus, we are changing the potential profit/loss to the breakeven point. More risk-averse traders may switch to the 4-hour chart after the trade and place a stop loss moving it in the direction of the trade. If the price meets the stop level (5680) without reaching the order (5350), we recommend to cancel the order: the market sustains internal changes that were not taken into account.

Technical Analysis Summary

PositionSell
Sell stopBelow 5350
Stop lossAbove 5680

IFCM Trading Academy - New era in Forex education
Pass Your Course:
  • Get Certificate
trading academy

The best trading conditions and high-level services for our clients

We are ready to assist you on any issue 24 hours a day.

Note:
This overview has an informative and tutorial character and is published for free. All the data, included in the overview, are received from public sources, recognized as more or less reliable. Moreover, there is no guarantee that the indicated information is full and precise. Overviews are not updated. The whole information in each overview, including opinion, indicators, charts and anything else, is provided only for familiarization purposes and is not financial advice or а recommendation. The whole text and its any part, as well as the charts cannot be considered as an offer to make a deal with any asset. IFC Markets and its employees under any circumstances are not liable for any action taken by someone else during or after reading the overview.

Close support
Call to Skype Call to WhatsApp Call to telegram Call Back Call to messenger