What next for cotton prices after upward trend?
Since the lows of the coronavirus pandemic, the price of cotton futures has had a marked upward trend.
However, this rally is approaching the historical resistance of $97.50, a price which has not been seen since 2012. Will it be possible to maintain this trend?
Source: Admirals MetaTrader 5, COTTONT, monthly - Data range: from February 1, 1995 to August 16, 2021, performed on August 16, 2021 at 10:00 pm CET. Please note: Past performance is not a reliable indicator of future results.
The chart above shows the monthly evolution of the price of cotton futures.
In it you can clearly see how historically the prices of this raw material have formed an ascending triangle in the long term, whose resistance is marked by the green line located at $97.50.
This is a very important resistance, reflecting the highs of 2012, 2014 and 2018.
The last up cycle that began in March 2020 was a marked boost on the price of cotton futures, as can be seen in the tilt of the ups front channel graphically delimited by the two black lines.
Only in February 2021, the bullish rally managed to break the resistance of this channel, although the RSI indicator was used by traders as an overbought signal to return the commodity to the previous chart figure.
Will the price of cotton futures overcome the historical resistance of $97.50 for the first time in nearly a decade?
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