• The CAC40 is set to close inside Fridays price action
• Reference resistance is set at 4,950
• Current ATR sets projections to 4,904.21
Like many indicies around the world, the CAC40( FRA40 ) is hovering near new highs for the month of October. The index has experienced a fresh round of momentum based on the most recent statements from the ECB suggesting that the may exapand their current program. However after Thursdays initial breakout and Fridays continuation, the CAC40 can be seen consolidating to start this weeks trading.
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As seen above, the CAC40 ( FRA40 ) is set to close Monday’s trading with the formation of an pattern. This formation is indicative of market consolidation, and is created using Fridays candle as a reference for values of . Support is identified using Fridays low at a price of 4,822. Resistance is found using Fridays high at a price of reference 4,950. With prices closing “inside” today, traders may begin preparing for a breakout later in the week.
In the event that the market breaks through either support or resistance, traders may use ATR to plan their projections for the index. Currently 1X daily ATR reads at 82.21 which will place projections at a price of 4,904.21. Conversely, if prices break through support at 4,822, traders will begin to project prices towards a values of 4,739.79 on fresh momentum.
Alternatively, if prices fail to breakout, it may signal continued consolidation for the CAC40 along with other indices. In this scenario, any breakout of support or resistance may be delayed. Traders may continue to wait for a breakout in this scenario, or opt to look for new range based positions based off of the markets current conditions.