• CAC40 declines in early morning trading
• support is found at 4,755
• A breakout exposes 4,400
The CAC40 ( FRA40 ) Index is currently trading down -1.62% on the day as French stocks have rapidly declined in early trading. Other European Indecies have sold off as well, including the DAX ( Ger30 ) as shares around the world are beginning to react to growing concerns regarding geopolitical uncertainty. Technically, the CAC40 has been moving lower after stalling near the psychological 5,000 level earlier this month. As prices continue to decline, traders are beginning to look for values of support to ascertain whether the CAC40 will bounce, or breakout to new monthly lows.
Currently, prices are approaching price support in the form of an ascending . This line depicted above has been created by connecting the October 14th low (4,580) with the current November low which is found at a price of 4,713. When coupled with Fibonacci analysis, potential support can be found using a 83.2% retracment value at a price of 4,755. If prices remain supported over this point, traders will again look for a bounce in the Index that may potentially test the current November high which stands at a price of 4,963
Alternatively, if the CAC40 continues to decline and breaks below the previously mentioned value of support, traders can begin targeting lower lows. Long term support is found again in the form of an ascending . This line of support has been drawn by connecting the October 2014 low with both the July and September 2015 lows. This places long term support for the Index near 4,400 at present.