CAC 40 Presses Yearly Highs Ahead of Election
- CAC 40 Presses Yearly Highs Ahead of Election
- Daily Resistance Remains at 5,362.30
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The CAC 40 is trading to new weekly highs this morning, as European markets as a whole continue to rally. Today’s move now places the CAC 40 just under its standing 2017 high at 5,362.30 ahead of the final election round of the French presidential election, which is to be held on May 7th. As prices currently standing, the CAC 40 is now up 0.93% with a daily high of 5,357.50. Leaders for Thursday’s session include Veolia Environnement (3.99%) and Boygues (+2.15%). Top Losers for today’s trading include both Societe Generale(-0.31%) and Air Liquide (-0.22%).
CAC 40, Daily Chart with 10 Day EMA
Technically, the CAC 40 has ended a period of short term consolidation by breaking out convincingly above 5300.00 in today’s trading. With the Index again trending higher, the next step for a bullish continuation would be a breakout above the standing yearly high at 5,362.30. A move of this nature would then place the CAC 40 at levels that haven’t been seen in nearly a decade. It should be noted that the next technical swing high would then be found at the January 2008 high of 5665.90.
Traders looking for a reversal in the CAC 40 should remain cautious at present. In the event that prices turn going into Sunday’s election, the Index must first trade back under 5,300.00. A close beneath this value would then expose the 10 day EMA (exponential moving average) at 5,268.25. The CAC 40 has not closed under this line since April 19th, and a move below 5,268.25 should be considered as a significant shift in the markets short term momentum.
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Sentiment figures for the CAC 40 (Ticker: France 40) remain at extremes for Thursday. IG Client Sentiment (IGCS) shows that traders remain net short the Index with a reading of -2.93. With only 25.5% of traders net long, this negative extreme may suggest that the CAC 40 may rally higher. In the event of a breakout to a new yearly high, it would be expected to see sentiment remain at its present extremes. However if prices reverse lower in the short term, traders should look for sentiment figures to trend back towards a more neutral reading.
--- 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.