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For some time now, the French economy has been the biggest area of concern for many of the EU observers, as Francois Hollande has struggled to get to grips with the economy and lurched from one PR disaster to another. Before this morning’s services purchasing managers index figures (PMI), it had only seen two months of growth out of the last twenty-four. Today is the first month without contraction for the manufacturing PMI in two years. These figures had many requiring a double take to be sure they had not misread the data. Unfortunately, the feel good factor that this generated was short lived. Shortly after these very strong French figures, Germany released their equivalent. Although German growth remains stronger than France, it has fallen by more than market expectations.
The daily chart shows the CAC is continuing to bump along just above the 50-day moving average (DMA), as it oscillates either side of the 4300 level. The CAC is currently sitting mid-range of the relative strength index and has shown interday resilience following the 100-DMA. Any close below that level could possibly trigger further falls.