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CAC 40 Bounces Significantly From Weekly Lows

CAC 40 Bounces Significantly From Weekly Lows

Walker England, Forex Trading Instructor

Talking Points:

The CAC 40 is rebounding significantly this morning, and is now trading up +0.77% for Thursday’s session. European markets as a whole are trading higher, as equities have so far reacted positively to commentary made from various ECB policy officials this morning. CAC 40 traders should also note that there will continue to be considerable market risk this week, with the first round of the French presidential election will be held on April 23rd. CAC 40 leaders for Thursday include BNP Paribas (+3.07%) and Publicis (+2.86%). Top Losers for the Index include both Solvay (-1.50%) and ArcelorMittal (-0.33%).

Technically, even with today’s advance, the CAC 40 is trading in an ongoing short term downtrend. Early in today’s session the Index was rejected at its 10 day EMA (exponential moving average), found at 5,053.08. Traders should monitor this value, as the line will continue to act as a point of resistance if prices decline further. In the event that the CAC 40 rallies higher, a breakout above the 10 day EMA would signal a significant shift in momentum. A bullish move of this nature would allow traders to again set potential targets towards the standing 2017 high of 5,152.00.

CAC 40, Daily Chart with 10 Day EMA

(Created Using IG Charts)

Sentiment totals for the CAC 40 (Ticker: France 40) have neutralized, as the Index has backed away from its yearly highs.Currently IG Client Sentiment reads at -1.17, with 46.1% of traders long the CAC 40. This is a significant shift from last Tuesday’s reading of -1.89 and last week’s reading of -3.62. If the CAC 40 traders to new weekly lows, traders may look for these sentiment totals to eventually flip positive. In this scenario, traders may begin looking for the emergence of a new longer term bearish trend. Alternatively, if the CAC 40 finds support and again rallies higher, sentiment totals may remain negative and shift back to extremes before the conclusion of the trading week.

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--- Written by Walker, Analyst for

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