CAC 40’s Battle at Resistance: Next Move Could Define Trend

The big question on everyone’s mind this week and heading into next week is what will happen with the indices: is this week’s bounce the beginning of a new bullish trend, or is it merely a bullish correction within a broader downtrend? Friday’s session on the CAC 40 presents an intriguing setup that could offer some clues. Currently, the price is moving within a flag formation, marked by blue lines, and has encountered a horizontal resistance level marked in yellow.

At this resistance, the price nearly formed a bearish engulfing pattern—just a few points shy of being a complete one. This two-candlestick formation, highlighted by a red rectangle, indicates that the resistance is being defended and remains a significant barrier. Given this technical setup, a further slide in the price seems more likely. A break below the lower line of the flag would trigger a solid sell signal.

Conversely, if the price breaks above the yellow horizontal resistance and manages to close the day above it, this would provide a strong buy signal, suggesting that the bullish momentum might be more than just a correction. Traders should closely watch these levels to determine the next direction.

Source: https://www.axiory.com/analytics/technical-analysis/cac-40-s-battle-at-resistance-next-move-could-defi