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CAC 40 Tests Channel Resistance

CAC 40 Tests Channel Resistance

Walker England, Forex Trading Instructor

Talking Points

  • The CAC 40 Advances on Chinese Trade Data
  • Prices Approach Resistance at 4,478
  • SSI is negative, reading at -1.66

CAC 40 30 Minute Chart

(Created using Marketscope 2.0 Charts)

Find out what is instore for the global equities market. Click HERE for our analysts Free forecast!

The CAC 40 is trading up 2.5% this morning, as major global equities markets have been buoyed this morning on better than expected Chinese trade data. Currently 38 of the 40 listed CAC components are trading higher, with ArcelorMittal leading the way trading up 8.51% on the session.

Technical traders should watch the next key value of resistance near 4,478. This value can be seen in the graph above at today’s R4 Fibonacci pivot. If prices remain beneath this value, it suggests that the CAC 40 may be trading inside of a declining price channel. In this scenario, traders may look for a turn lower in the Index, and may begin targeting values of support near 4,150. Alternatively, if prices breakout and close above resistance, this may suggest further bullish momentum is instore for the Index. In a continued bullish scenario, traders may again look for prices to challenge the March 2016 high near 4582.

Find out the latest positioning totals with DailyFX’s sentiment page

SSI (speculative sentiment index) for the CAC 40 (Ticker: FRA40) is currently reading -1.66. This negative value is congruent with the markets current bullish momentum. In the event of a continued advance, traders should look for SSI to move to a negative extreme of -2.0 or more. Alternatively, in the event of a price reversal, traders should look for SSI to retreat towards more neutral values.

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.