Analys från DailyFX
CAC 40 Presses Yearly Highs Ahead of Election
Talking Points:
- CAC 40 Presses Yearly Highs Ahead of Election
- Daily Resistance Remains at 5,362.30
- Looking for additional trade ideas for equities markets? Read our 2017 Market Forecast
The CAC 40 is trading to new weekly highs this morning, as European markets as a whole continue to rally. Today’s move now places the CAC 40 just under its standing 2017 high at 5,362.30 ahead of the final election round of the French presidential election, which is to be held on May 7th. As prices currently standing, the CAC 40 is now up 0.93% with a daily high of 5,357.50. Leaders for Thursday’s session include Veolia Environnement (3.99%) and Boygues (+2.15%). Top Losers for today’s trading include both Societe Generale(-0.31%) and Air Liquide (-0.22%).
CAC 40, Daily Chart with 10 Day EMA
Technically, the CAC 40 has ended a period of short term consolidation by breaking out convincingly above 5300.00 in today’s trading. With the Index again trending higher, the next step for a bullish continuation would be a breakout above the standing yearly high at 5,362.30. A move of this nature would then place the CAC 40 at levels that haven’t been seen in nearly a decade. It should be noted that the next technical swing high would then be found at the January 2008 high of 5665.90.
Traders looking for a reversal in the CAC 40 should remain cautious at present. In the event that prices turn going into Sunday’s election, the Index must first trade back under 5,300.00. A close beneath this value would then expose the 10 day EMA (exponential moving average) at 5,268.25. The CAC 40 has not closed under this line since April 19th, and a move below 5,268.25 should be considered as a significant shift in the markets short term momentum.
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Sentiment figures for the CAC 40 (Ticker: France 40) remain at extremes for Thursday. IG Client Sentiment (IGCS) shows that traders remain net short the Index with a reading of -2.93. With only 25.5% of traders net long, this negative extreme may suggest that the CAC 40 may rally higher. In the event of a breakout to a new yearly high, it would be expected to see sentiment remain at its present extremes. However if prices reverse lower in the short term, traders should look for sentiment figures to trend back towards a more neutral reading.
— Written by Walker, Analyst for DailyFX.com
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What’s inside:
- EURUSD broke the ‘neckline’ of a bearish ‘head-and-shoulders’ pattern, April trend-line
- Resistance in vicinity of 11825/80 likely to keep a lid on further strength
- Targeting the low to mid-11600s with more selling
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Coming into last week we pointed out the likelihood of finally seeing a resolution of the range EURUSD had been stuck in for the past few weeks, and one of the outcomes we made note of as a possibility was for the triggering of a ’head-and-shoulders’ pattern. Indeed, we saw a break of the ’neckline’ along with a drop below the April trend-line. This led to decent selling before a minor bounce took shape during the latter part of last week.
Looking ahead to next week the euro is set up for further losses as the path of least resistance has turned lower. Looking to a capper on any further strength there is resistance in the 11825-11880 area (old support becomes new resistance). As long as the euro stays below this area a downward bias will remain firmly intact.
Looking lower towards support eyes will be on the August low at 11662 and the 2016 high of 11616, of which the latter just happens to align almost precisely with the measured move target of the ‘head-and-shoulders’ pattern (determined by subtracting the height of the pattern from the neckline).
Bottom line: Shorts look set to have the upperhand as a fresh month gets underway as long as the euro remains capped by resistance. On weakness, we’ll be watching how the euro responds to a drop into support levels.
For a longer-term outlook on EURUSD, check out the just released Q4 Forecast.
EURUSD: Daily
—Written by Paul Robinson, Market Analyst
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You can follow Paul on Twitter at@PaulRobinonFX.
Why and how do we use IG Client Sentiment in trading? See our guide and real-time data.
EURUSD: Retail trader data shows 37.3% of traders are net-long with the ratio of traders short to long at 1.68 to 1. In fact, traders have remained net-short since Apr 18 when EURUSD traded near 1.07831; price has moved 9.6% higher since then. The number of traders net-long is 15.4% lower than yesterday and 16.4% higher from last week, while the number of traders net-short is 0.4% higher than yesterday and 10.5% lower from last week.
We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests EURUSD prices may continue to rise. Positioning is more net-short than yesterday but less net-short from last week. The combination of current sentiment and recent changes gives us a further mixed EURUSD trading bias.
— Written by Christopher Vecchio, CFA, Senior Currency Strategist
To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com
Follow him on Twitter at @CVecchioFX
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Why and how do we use IG Client Sentiment in trading? See our guide and real-time data.
GBPUSD: Retail trader data shows 38.2% of traders are net-long with the ratio of traders short to long at 1.62 to 1. In fact, traders have remained net-short since Sep 05 when GBPUSD traded near 1.29615; price has moved 3.4% higher since then. The number of traders net-long is 0.1% higher than yesterday and 13.4% higher from last week, while the number of traders net-short is 10.6% lower than yesterday and 18.3% lower from last week.
We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests GBPUSD prices may continue to rise. Yet traders are less net-short than yesterday and compared with last week. Recent changes in sentiment warn that the current GBPUSD price trend may soon reverse lower despite the fact traders remain net-short.
— Written by Christopher Vecchio, CFA, Senior Currency Strategist
To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com
Follow him on Twitter at @CVecchioFX
To be added to Christopher’s e-mail distribution list, please fill out this form
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