- The Parisian CAC fell significantly during the trading session on Tuesday, but he continues to see support in the same general vicinity, namely the €7900 level.
- Because of this, I do think that we have a situation where traders will pay close attention to whether or not this level holds, as it is a large, round, psychologically significant figure, and of course it’s also an area that has already been tested multiple times.
- That's the reason why I will be watching very closely.
Are We Still Range Bound?
I think at this point in time, the market is still trying to question whether or not we are range bound, and I do think that the next couple of sessions could be a pivotal turn of events for the market, and therefore we need to pay close attention to what happens next. Ultimately, this is a market that will have to make a decision, and the fact that we have the European Central Bank with an interest rate decision coming up in the next couple of days means that we are going to see a lot of noise. At this point in time, we could see some type of huge decision made, and once it’s made, we can put money to work.
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If we were to break down below the €7900 level, then the market could go falling toward the 200-Day EMA which is closer to the €7700 level. On the other hand, if we turn around a break above the 50-Day EMA, it could open up the possibility of a move to the €8250 level, an area that has previously been resistance, and therefore I think you need to look at that as the potential top of the overall range.
All things being equal, I think you continue to see a lot of noisy behavior of the next couple of sessions, and therefore I think you need to also look at it through the prism of whether or not we get any type of momentum. Ultimately, this is a market that will make a bigger decision soon, and I will be following which of her direction it breaks.
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