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CAC 40 Forecast: At Key Levels: Decision Time

By Christopher Lewis
Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.
  • In my daily analysis of the world’s indices, Paris has caught my attention as we have bounced after we had seen such a massive amount of negative pressure over the previous 4 sessions.
  • That being said, the market is likely to continue to see a lot of noisy behavior, but I do think that given enough time, we will have to make a bigger decision.
  • There are a couple of levels that I will be paying close attention to in the CAC 40 before putting a position on in either direction.

Technical Analysis

The €7330 level is an area that has been important multiple times, and it is worth noting that we have bounced from there. Because of this, I do think that we have found a short-term floor, and therefore I think it’s worth paying close attention to what happens next. The €7330 level being violated to the downside would be a very negative turn of events, and could send the Parisian CAC much lower, perhaps even sending most of the European indices down with it as it would all more likely than not be correlated.

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On the other hand, if we can break above the €7450 level, then we might have a bit of a relief rally ahead of us. In that environment, we probably see the market go looking to the €7700 level, which is where the latest swing high was, and it is also an area where we have seen a lot of noise. Anything above there would obviously be very important, and it would probably bring a lot of money into the market to chase momentum to the upside.

CAC 40 Forecast Today 10/9: Key Levels: Decision Time (graph)

All things being equal, I think this is a market that will more likely than not see a lot of resistance above, so it would not surprise me at all to see rallies get faded. Keep in mind that this is a major European index, so it does make a lot of sense to follow other ones at the same time, because it can give you a bit of a “heads up” as to where this is going.

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Christopher Lewis
About Christopher Lewis
Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.
 

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