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Hugo in HTO Trading,

CAC 40: Bearish inside week

Since the beginning of the year the index fell more than 4.0% and last week lost more than 2.5%, however continues in a recovery phase since the beginning of March 2016.

Last week the index fell with a narrow range, creating an inside week and closed near the low of the week, although managed to close within previous week range, showing slightly on the bearish side of neutral.

The Stochastic is showing a overbought market however is still displaying a strong bullish momentum.

Expecting a downward move to a key level at 4,217 (scenario 1) on a break below the previous week low at 4,365 and a bounce from a key level at 4,217 could push the index up to a weekly resistance at 4,518 (scenario 2).