CAC40 – The CAC 40 is Trying to Move Lower

CAC40 (4,607.50)

The CAC40, France’s headline equity bourse, is trying to break lower again today after finishing Friday 1.12 percent lower. Futures are pointing to a lower start on Monday as European markets are likely to track US and Asian markets lower today. The price of Brent Crude also continues to fall placing pressure not only on other commodities but equities.

Technical Analysis

Right now prices are testing a key support pivot at 4,620. The bourse is currently below this level and a daily close here will be even more bearish. Last week marked the first bearish breakout for the CAC40. Traders are going to try and further exploit the narrow 45 day average trading range lower. The next bearish target is lining up at 4,578.00.

Last week, the CAC40 hit an intraday low at 4,599 on Friday. If this level holds again, then the bourse could move higher towards 4,645. A break above this technical resistance level will challenge resistance levels and invalidate the bearish momentum. The first technical resistance level above 4,645 is at 4,690. A daily close above that latter level will challenge the next technical resistance at 4,758. However, looking at the charts and the negative RSI convergence indicates a possible top in place with further losses ahead for the headline French CAC40.

There are also a number of economic calendar releases this week, not only in Europe but North America and the United Staes, that should cause volatility in not only the CAC40 but other headline bourse throughout Europe.

Global Economic Calendar

United States

Tuesday: Existing home sales

Wednesday: Personal income, durable goods

Global

Tuesday: German consumer confidence

Wednesday: Mexico economic activity

Thursday: Japan’s jobless numbers