The Cotton Association of India lowered its cotton production forecast for India in the agricultural season 2018/19 by 10.3%. Will the Cotton quotations continue growing?
In the last review of the Cotton Association of India, a cotton harvest of 31.2 million kip is predicted for June (approximately 218 kg in a bale). Whereas in its October review it was expected to produce 34.8 million bales. The reduction in cotton crop forecasts is caused by a severe drought in India. According to the India Meteorological Department, in the state of Gujarat - the main cotton producer in the country, the amount of precipitation is 47% lower than last year’s level. In general, in India, since the beginning of the monsoon season on June 1, precipitation is 19% less than last year. Another positive factor for quotes was the increase in exports of American cotton per week. This was reported by U.S. Agriculture Department. On July 30, in Shanghai, US Treasury Secretary Steven Mnuchin and sales representative Robert Lighthizer will hold talks with Chinese Vice Premier Liu He about lifting a number of trade restrictions and canceling duties. In particular, China’s purchases of American cotton may be increased.
On the daily timeframeCotton: D1 to trying to break the downtrend upward. Various technical analysis indicators formed signals for improvement. Further growth of quotations is possible in case of an increase in global demand and deterioration of the weather in India.
- The Parabolic indicator shows a signal to increase.
- The Bolinger bands expanded, indicating a volatility increase . Both lines of Bollinger have a slope up.
- The RSI indicator is above the 50 mark. It has formed a divergence to increase.
- The MACD indicator gives a bullish signal.
The bullish momentum may develop if Cotton exceeds its last maximum: 65. This level can be used as an entry point. The initial stop lose may be placed below the last lower fractal, the Parabolic signal and a 3-year low: 61.7. After opening the pending order, stop shall be moved following the signals of Bollinger and Parabolic to the next fractal minimum. Thus, we are changing the potential profit/loss to the breakeven point. More risk-averse traders may switch to the 4-hour chart after the trade and place a stop loss moving it in the direction of the trade. If the price meets the stop level (61,7) without reaching the order (65), we recommend to cancel the order: the market sustains internal changes that were not taken into account.
Technical Analysis Summary
Position | Buy |
Buy stop | Above 65 |
Stop loss | Below 61,7 |
This overview has an informative character and is not financial advice or a recommendation. IFCMarkets. Corp. under any circumstances is not liable for any action taken by someone else after reading this article.
Recommended Content
Editors’ Picks
EUR/USD stays near 1.0400 in thin holiday trading
EUR/USD trades with mild losses near 1.0400 on Tuesday. The expectation that the US Federal Reserve will deliver fewer rate cuts in 2025 provides some support for the US Dollar. Trading volumes are likely to remain low heading into the Christmas break.
GBP/USD struggles to find direction, holds steady near 1.2550
GBP/USD consolidates in a range at around 1.2550 on Tuesday after closing in negative territory on Monday. The US Dollar preserves its strength and makes it difficult for the pair to gain traction as trading conditions thin out on Christmas Eve.
Gold holds above $2,600, bulls non-committed on hawkish Fed outlook
Gold trades in a narrow channel above $2,600 on Tuesday, albeit lacking strong follow-through buying. Geopolitical tensions and trade war fears lend support to the safe-haven XAU/USD, while the Fed’s hawkish shift acts as a tailwind for the USD and caps the precious metal.
IRS says crypto staking should be taxed in response to lawsuit
In a filing on Monday, the US International Revenue Service stated that the rewards gotten from staking cryptocurrencies should be taxed, responding to a lawsuit from couple Joshua and Jessica Jarrett.
2025 outlook: What is next for developed economies and currencies?
As the door closes in 2024, and while the year feels like it has passed in the blink of an eye, a lot has happened. If I had to summarise it all in four words, it would be: ‘a year of surprises’.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.