CAC 40 (FRA40/USD)
The CAC 40 (FRA40/USD) is France’s benchmark stock index and one of the most watched market instruments in Europe. It reflects the performance of the 40 largest publicly traded companies on the Euronext Paris exchange — many of which are global powerhouses. In this tutorial, you’ll learn exactly how the CAC behaves, what drives it, and how to build trade setups that actually work.
What Is the CAC 40 (FRA40/USD)?
The CAC 40 is short for “Cotation Assistée en Continu.” It serves as France’s version of the Dow or S&P 500, offering a concentrated snapshot of French corporate health. The companies listed are heavyweights in industries like luxury goods, finance, energy, telecom, and pharmaceuticals.
Firms like LVMH, TotalEnergies, BNP Paribas, and Airbus dominate the index — making the CAC a mix of both local strength and international exposure. Even though it’s a French index, many companies in the CAC derive revenue globally, especially across Europe, Asia, and North America.
Why the CAC 40 Moves
The CAC reacts to a broad range of catalysts. Because of its geographic and sector exposure, it doesn’t just move on French news — it often tracks broader Eurozone shifts and global macro flows. Key drivers include:
European Central Bank decisions:
ECB policy directly influences the CAC via bond yields and equity sentiment
French economic data:
Inflation, unemployment, and GDP all affect investor confidence
Luxury and consumer sector strength:
Since LVMH and other consumer brands hold weight, global retail data matters
Oil and energy prices:
TotalEnergies is a major component, so energy fluctuations influence the CAC
Global risk appetite:
Like all major indices, it moves sharply on broader market sentiment
Currency fluctuations:
EUR/USD plays a role, especially with CAC exporters
How to Trade the CAC 40 (FRA40/USD)
The CAC tends to move with structure, but still offers volatility when the market demands it. Traders can find clean technical setups — particularly if they align with European data releases or global market reactions.
Day traders can target European open moves, especially after ECB commentary
Swing traders focus on economic trends in France or the broader Eurozone
Confluence traders combine French CPI with EUR/USD behavior and sector rotation
To stay on top of CAC movements:
Trade around Eurozone PMI, CPI, and GDP data
Watch correlation with DAX 40 and FTSE 100 during EU trading hours
Observe luxury sector sentiment from global markets — the CAC is highly sensitive to it
Monitor ECB tone shifts for major directional plays
Key Characteristics
Volatility
Moderate, spikes on Eurozone news
Liquidity
Excellent during European session
Correlations
EUR/USD, DAX 40, oil, retail sector
Session Behavior
Active during Frankfurt and Paris hours
Best Use Case
EU macro setups, structure-based swing trades
Example Trading Scenario
French GDP misses expectations. CAC drops as sentiment weakens. You wait for a clean lower high retest and enter short.
Entry: Sell at 7,890.00
Stop Loss: 7,940.00
Take Profit: 7,780.00
Risk-Reward: 1:2.2
Patience, structure, and a macro trigger — it’s a textbook CAC setup.
Summary Checklist
Asset Type: Index
Symbol: FRA40/USD
Volatility: Moderate
Correlated With: EUR/USD, luxury sector, Eurozone data
Best For: Macro setups, sector sentiment plays, ECB news reactions
Frequently Asked Questions
What is the CAC 40 (FRA40/USD)?
It’s the leading French stock index, tracking 40 top-performing companies listed on the Euronext Paris exchange.
When is the best time to trade the CAC?
During the European session, particularly around ECB pressers, French CPI, or GDP releases.
What sectors influence the CAC most?
Luxury goods, energy, banking, and telecoms have the biggest impact on its movement.
Does the euro affect CAC direction?
Absolutely. A weaker euro tends to lift CAC exporters, while a stronger euro can weigh on the index.
What is the average daily pip movement of FRA40/USD?
The CAC 40 usually moves between 150 and 350 pips daily, with bigger surges on major Eurozone announcements.