CAC40 Trades at Range Resistance
- The CAC40 is trading in a 400 Point Range
- Resistance is found near 4,700
- Range Support is found near 4,300
FRA40 1Day Chart
(Created using Trading View Charts)
Looking for more FX Reversals? Sign up for my email list here: SIGN UP HERE
The CAC40 (FRA40) has declined back below 4,700 in early trading this morning. This technical area of resistance is important because it marks the top of a well-defined trading range, which has been developing for the last month. It should be noted that oscillators such as CCI are also turning from overbought conditions on the daily chart, which can help validate the previously mentioned point of resistance. If the CAC40 remains under 4,700, traders will look for prices to decline back towards range support, which is found near 4,300. In the event that price reach support, range traders may then reevaluate the range, and look for potential opportunities to buy the CAC40 back towards resistance.
Only a breakout above resistance or below support would invalidate the current market range. In a breakout scenario traders may choose to confirm a breakout by waiting for a daily close either above 4,700 or below 4,300. Also, in the event of a breakout, traders may elect to target a 1x extension of the current range as potential targets. This means a bullish breakout for the CAC40 would first target a price of 5,100, while a bearish breakout would set initial targets toward 3,900.
---Written by Walker England, Trading Instructor
To Receive Walkers’ analysis directly via email, pleaseSIGN UP HERE
To contact Walker, email email@example.com.
Do you know the biggest mistake traders make? More importantly, do you know how to overcome the biggest mistake? Read page 8 of the Traits of Successful Traders Guide to find out [free registration required].
Contact and Follow Walker on Twitter @WEnglandFX.
Video Lessons || Free Forex Training
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.