CAC 40 once again bounced strongly from key strong support at around 7,464, but the index must close above 7,725 to demolish the current bearish trend.
If CAC is indeed closing above 7,725, it could experience a short sweet rally to around 7,900, possibly up to 8,000, but the declining 55 daily moving average and the 100 moving average will add to the overhead resistance.
The strength indicator RSI is still showing negative sentiment. However, the divergence recorded when CAC tested the 7,464 support a second time indicates downtrend exhaustion.
But, if CAC 40 closes below 7,464, the bearish trend is to be resumed with no strong support until around 7,300.