Talking Points
- CAC40 Fibonacci resistance is found at 5,006
- Support is found near 4,420
- GDP data is expected at 1.7% on Friday
CAC40 1Day
(Created using TradingView Charts)
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The CAC40 (FRA40) is beginning to turn under Fibonacci resistance found at a 78.6% retracement value near 5,006. This value is calculated by measuring the distance between the August 6th high of 5215 and the August 24th low of 4,225. If prices remain under resistance, this suggests that the CAC40 may be consolidating inside of a larger triangle, which was covered last week. In the event of a decline, traders may begin looking for prices to test trendline support near 4,420. A breakout here would suggest a return to trending market conditions, and an end to the current patter of consolidation.
Alternatively, in the event that the CAC40 continues to rally, traders will look for the Index to challenge again points of resistance. This includes the previously mentioned 78.6% retracement value at 5,006 and next the 88.6% retracement value found at 5,051. A move through these values would point towards a return to bullish momentum. In which case, this opens the CAC40 up to challenge the current 2015 high, which stands at 5,284.
For the remainder of the week, traders should also continue to monitor the economic calendar. Tomorrow GDP (Gross Domestic Product) data is being released for both Germany and the Euro Zone. Euro-Zone GDP is set to be released at an estimated 1.7% and is labeled as a high importance event. Depending on how this data is received, it may directly impact the ECBs asset purchases for December. With this in mind, GDP data may create added volatility for CAC40 traders on Friday, and allow traders to look for one of the previously mentioned scenarios above.
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