The French CAC equity index is up eight days in a row, rising to fresh all-time highs above the psychological level of 7,000 EUR. On Monday, it was up 0.2% at the time of writing, being the strongest of the EU major indices.
Macro data remain optimistic
On Friday, traders paid attention to the US labor market update. October nonfarm payrolls increased by 531,000 jobs, and data for September was revised higher to show 312,000 jobs created instead of the previously reported 194,000. Nevertheless, both the USD dollar and US yields fell after the numbers.
Earlier in the session, the EU Sentix investor confidence rose to 18.3 for November but failed to reach the estimate of 18.6. The previous number was revised to 16.9.
Central banks speakers still helping stocks
Additionally, the European Central Bank (ECB) Chief Economist, Philip Lane, said that the current period of inflation is very unusual and temporary. Moreover, we believe there are strong reasons for inflation to fall next year , he added. Lastly, Lane concluded that the ECB would ensure Europe has a strong recovery and that an unnecessary adjustment of financing costs does not derail it.
His remarks were a bit dovish as everything points to the fact that the ECB will not raise rates anytime soon, especially when they think inflation will come down next year . The CAC surged to new highs after his comments.
Later in the day, several FOMC members will have speeches, including Federal Reserve Chair Jerome Powell, who will deliver opening remarks at an online conference on gender and the economy, virtually hosted by the Federal Reserve Board. Since the topic is not monetary policy, it might not cause market volatility.
Charts look bullish
There are two crucial supports for the CAC index at the moment – one at the psychological level of 7,000 EUR and the other at previous highs near 6,900 EUR. As long as the index trades above them, all three outlooks remain bullish, and dips are expected to be bought.
Alternatively, it is now challenging to find any resistance since the index has never been here. Therefore, traders might watch for any unusual price formations indicating a possible price reversal .