• The CAC40 continues to consolidate in a 128 point range
• Daily resistance is set at 4,950
• A breakout opens the possibility of a move towards 4,694
The CAC40( FRA40 ) along with other European indicies such as the DAX ( GER30 ) are trading lower in early morning trading today. For the CAC40, this move has effectively eliminated yesterdays gains, while keeping the Index inside of a well defined range. It should be noted that this weeks price actoin is still trading inside of last Fridays price action . This places current resistance at Fridays high, which is found at a price of 4,950. Conversely, support for the Index remains at a price of 4,822, which represents last Fridays low.
As seen in the graph above, prices are currently nearing values of range support. In the event that prices stay supported above 4,822 traders may begin looking for opportunities to trade the existing range. Initial targets for range traders can be set back towards the previously mentioned points of resistance, while risk can be managed by placing stop loss orders beneath last Fridays low.
With prices for the Index off nearly 1% today, traders may also continue to look for a breakout of the CAC40. A breakout below support, would be represent a change in momentum for the Index as a move would be contra to last week’s breakout. In this scenario, traders looking for lower lows on the Index can use a 1X extension of the current 128 point range for initial pricing targets near 4,694.