Talking Points
- The CAC40 declines 4.7% on the day
- Price action support is found at 4,060
- SSI reads at an extreme +3.08
CAC40 Daily Chart
(Created using Marketscope 2.0 Charts)
Losing Money Trading Forex? This Might Be Why.
The CAC40 continues to extend its losses into this week's close, after systemic losses in equities markets have developed around the world. So far, the Index has declined as much as 4.7% off its daily high and has now printed a daily low at 4,149. This move is significant, because the CAC40 has now traded through the August 2015 low, which was priced at 4,225. This lower low adds credence to the markets current downtrend, and has left many traders speculating on where current support may be found.
It should be noted that the next value of support for the Index can be found at 4,060. This value represents the 2015 low. If prices hold above this value, it may suggest that the CAC40 is developing into a longer-term consolidating pattern. However, in the event of another breakout, traders will begin to focus on lower values down the chart. This includes psychological support at 4,000 followed by the 2014 low established at 3.786.
Trend traders tracking sentiment should note that SSI (Speculative Sentiment Index) for the CAC40 is still holding at an extreme, reading at +3.08. With over 75% of positioning long, this may be taken as a bearish contrarian signal.
To Receive Walkers' analysis directly via email, please SIGN UP HERE
See Walker's most recent articles at his Bio Page.
Do you know the biggest mistake traders make? More importantly, do you know how to overcome the biggest mistake? Read page 8 of the Traits of Successful Traders Guide to find out [free registration required].
Contact and Follow Walker on Twitter @WEnglandFX.
Video Lessons || Free Forex Training
Trading Using Fibonacci (13:08)
Reading the RSI, Relative Strength Index (13:57)
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
Learn forex trading with a free practice account and trading charts from FXCM.
