CAC is failing the upside breakout, starting to look bearish again


It looked like the French CAC index posted a nice bullish breakout from the consolidation triangle. All this occurred during a medium-term uptrend, which suggested the triangle pattern was only a continuation pattern in the bullish trend. 

However, bullish momentum quickly faded, and the index dropped back inside the triangle, with the price now breaking below the lower support line of this formation. That suggests we might see a more substantial correction as false breaks from these patterns are usually met with a strong movement in the opposite direction. 

The support is now seen near 5,000 EUR, and if not held, the index might drop quickly to 4,930 EUR and possibly to 4,900 EUR.

The most critical support level is seen near 4,860 EUR, and if broken to the downside, the medium-term trend would most likely change back to bearish.

Alternatively, if the index starts rallying again, the resistance zone seems to be at around 5,100 EUR and afterward near 5,225 EUR. Bulls need to conquer this level to push the index back toward the pre coronavirus highs. 
Cookie Policy: The Axiory website uses cookies and by continuing using the website you consent to this. Risk Warning: Trading leveraged products such as Forex and CFDs may not be suitable for all investors as they carry a high degree of risk to your capital. Please read the full Privacy Policy.