The CAC40 Rallies After Yesterday’s 4.1% Decline
CAC40 30 Minute Chart
(Created using Marketscope 2.0 Charts)
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The CAC40 has opened higher this morning, with French shares attempting to rebound from yesterday’s 4.1% decline. Prices today have been bolstered primarily by Euro Zone GDP figures coming out in line with expectations at 1.5% (YoY) (4Q A). With prices now trading back over 3,950, it opens the possibility that price action may attempt to completely invalidate yesterday’s bearish breakout. To validate this opinion, traders should continue to monitor Thursdays high, which was established on the open at 4,022.
In the event that prices fail to breakout to a new high, and close the day inside of Thursday’s price action, it will prepare the Index for a breakout early next week. Using a 1-X extension of yesterday’s 132-point candle, bullish breakouts may begin to target prices near 4,154. Conversely, if the CAC40 resumes its downtrend, bearish breakouts below 3,890 may begin to target prices near 3758.
SSI (Speculative Sentiment Index) for the CAC40 (Ticker FRA40) is currently reading at +1.64. This value is little changed from yesterday. However, with SSI for the CAC40 remaining positive, it suggests that there may be future declines in store for the Index. In the event that sentiment continues to shift towards a more neutral value, it may suggest that the current downtrend is beginning to slow.
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.