(MENAFN- DailyFX) Talking Points
CAC 40 Prices End 13 Days of Consolidation as Brexit Fears Ease CAC 40 Prices Reach New Weekly Highs as Prices Trade up 1.48% Sentiment Readings Continue to Decline, SSI Reads at +1.16
CAC 40 Daily Chart
(Created using Marketscope 2.0 Charts)
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The CAC 40 has surged to a new weekly high this morning, with the Index trading up 1.48% on the day. All 40 listed stocks are trading higher, with Societe General leading the group trading up 3.05%. With a lack of European data on this week’s economic calendar, most of the volatility generated from UK news on the forthcoming Brexit referendum. So far, equities markets have generally been reacting positively to recent Brexit polling that suggests that the Remain campaign remains in the lead.
Price action for the CAC 40 is now trading above a key value of (previous) resistance at 4,350. This bullish breakout has effectively ended 13 days of consolidation for the Index. While it is still to be determined whether today’s breakout constitutes a new trend, or simply a retracement, bullish traders may begin looking for the CAC 40 to move towards higher highs. Areas of resistance may include a 61.8% Fibonacci retracement found at 4,469.85, and the April 2016 high at 4,616.50. A move to this value would be significant, as it would further make the technical case that the yearly low is potentially in place at 3,890.50.
Alternatively, if prices break back inside of the range, it would suggest that this morning’s move is a retracement in a broader downtrend. In this scenario, traders may look for prices to test the range low at 4,244.50. A breakout below this value of support would suggest a resumption of the CAC 40’s downtrend, with traders looking for prices to challenge the low at 3,890.50.
Find out real time sentiment data with the DailyFX’s sentiment page.
Sentiment data for the CAC 40 (Ticker: FRA40) continues to decline as prices advance. SSI (speculative sentiment index) now stands at +1.16, which is down from the last reported reading of +1.43. If SSI flips negative, it may suggest further advances in price for the CAC 40. Alternatively, if the CAC 40 begins to decline through values of support, traders should look for SSI to move back towards positive extremes.
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