The downward movement is going well with the cotton, with the price creeping in the area at 23.6 Fibonacci for some time. The area withstands, and after confirmation by the sword swallow, the movement continues downwards. With the CCI there is also a sword and a divergence, which additionally indicates the reversal of movement. The above graphic is before the development of the movement at the first potential shortstop opportunity.
Now the downward movement continues to test for diagonal support, with which we will expect its break and retest. Here, we believe that a potential second chance will be found for a new short or for additions to the short positions already opened. Confirmation of these scenarios is key and we will have to wait for the price movement to develop.
From a fundamental point of view, cotton production in the world remains high, with India stepping up production, with Brazil, Pakistan, Australia and the US having minimal declines. China, as the world's leading cotton buyer, has managed to balance production shortages, with demand moderating at this stage. Stronger harvest forecasts remain relevant for several of the strongest extractive countries such as the US and India. Therefore, export expectations are higher, which is a factor that puts pressure on commodity prices.
Read more:
25 Canada Square, Level 33, office 50, Canary Wharf London, E14 5LQ +44 20 3608 6256
World Financial Markets - 0700 17 600 Varchev Exchange - 0700 115 44
Varchev Finance Ltd is registered in the FCA (FINANCIAL CONDUCT AUTHORITY) with a passport in the United Kingdom: FCA, United Kingdom - registration number: 494 045, which allows provision of financial services in the United Kingdom.
Varchev Finance Ltd strictly comply with the statutes of the European directive MiFID (Markets in Financial Instruments). targeting increased efficiency, transparency and uniformity of financial instruments.
Varchev Finance Ltd is authorized and regulated by the Financial Supervision Commission - Sofia, Bulgaria: License number RG-03-02-05 / 15.03.2006
The information on this site is not intended for distribution or use by any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.
Disclaimer:
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 63,41% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.