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CAC 40 Little Changed on ECB News

CAC 40 Little Changed on ECB News

Walker England, Forex Trading Instructor

Talking Points:

CAC 40 is little changed today, despite this morning’s highly anticipated ECB (European Central Bank) rate decision. As expected rates were kept in line with expectations at 0.0%, but now the market is waiting on Mario Draghi to speak to get further insight into this decision. Top winners for the CAC 40 include Pernod Ricard (+1.26%) and AXA (+0.93%). Losers for the day include Essilor International (-2.42%) and Unibail-Rodamco (-1.36%).

Technically, the CAC 40 is drifting lower after yesterday’s breakout. However with the Index failing to trade to a new daily low or high, the Index is poised to close the session with the creation of an inside bar. This means traders may use Wednesdays high and low as points of support and resistance. A breakout above yesterday’s high of 4875.70 would place the CAC 40 back inside of last week’s range; while a move below the low at 4,827.10 suggests that the Index is preparing for a deeper retracement.

CAC 40, Daily Chart with Range

(Created Using TradingView Charts)

Looking for additional trade ideas for Oil and Commodities Markets? Read Our 2017 Market Forecast

Intraday the CAC 40 is currently bouncing from short term support at 4,840. This point is depicted in the graph below as the S3 pivot, and bottom of today’s range. If prices remain supported here, the CAC 40 may attempt to trade back towards range resistance found at 4,866.60. It should be noted here that the Index has already tested this point of resistance once, and failed to breakout higher.

In the event of a late session breakout, traders should continue to monitor both the S4 and R4 pivots. A move below S4 at 4,826.60 would see the CAC 40 trading back in the direction of its short term trend. Further declines would expose new weekly lows, and the next critical point of daily support near 4,822.30. Alternatively, a bullish breakout above the R4 pivot at 4,880.00 may expose new weekly highs above 4,911.40.

CAC 40, 30 Minute Chart with Pivots

(Created Using TradingView Charts)

--- Written by Walker, Analyst for DailyFX.com

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

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