Technical Update - CAC 40 strong bounce from key support, can it turn into bullish trend?
Kim Cramer Larsson
Technical Analyst, Saxo Bank
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.
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.
FRA40 CFD levels. Bounce from 0.786 retracement at 7,487.
Resistance at around 7,725. A break below 7,460 is likely to send FRA 40 down to around 7,280
Resistance at around 7,725. A break below 7,460 is likely to send FRA 40 down to around 7,280