The French Stock Exchange ends the Week on a Down Note
On Friday the French stock bourse, the CAC 40 traded lower and then closed with an inside bar ending the week. This is a bearish cue that traders should pay attention to as the markets get ready to open for the week.
Right now the French headline stock exchange is trading near its monthly high. This new monthly high was set last Monday, July 11, and lines up at 4,517. With price action failing to break through the new monthly high, this upside barrier is acting as the first level of technical resistance. On the downside, price action has yet to break back below the daily low. This was set on Thursday, July 14. This low price point is the first layer of support for the CAC 40 and lines up at 4,472. Please use the below daily MT 4 chart for today’s daily technical analysis.
Trading the French Stock Exchange
Should the CAC 40 manage to move higher or lower, today, traders can use the average trading range (ATR) in order to help plan price projections for this particular stock bourse. Right now, the ATR is at 86. This means the bullish breakout is lining up near 4,600. The bearish breakout is lining up around 4,390. These are the two technical levels that traders need to pay attention to this morning.
Should price action fail to break out on either side of these levels, then French stocks can be in for some consolidation, or sideways trading, this week. If this scenario happens, traders who employ a carry long strategy, might want to sit on the sidelines and wait for a breakout to occur before placing a trade. Short term traders can consider a range trade approach. This means buying on dips and selling at peaks until the breakout occurs.
Traders should also note that ATR is likely to pick up again. The United Kingdom recently voted “yes” to leaving the European Union and this has not finished playing out. With the new government in place, it is a matter of time until the UK enacts “Article 50.” This will begin divorce proceedings from the EU returning volatility not only to the European financial markets, but to the global financial system.