Hi Traders! Cotton forecast and technical analysis is here. As we do in every technical analysis post we are going to perform the multi-time frame analysis on Cotton. We do our analysis on the MetaTrader4 platform (MT4). Some very interesting and useful tips and hacks about the MT4 platform could be found here. As usual, we will start our analysis from the highest timeframe which will be the weekly chart here.
On the weekly chart, the price which was moving lower reached an important psychological round number 50 level. In addition to this, we had a bullish divergence which has formed between the first low that has formed on 25th August 2019 and the second low that has formed on 29th March 2020 based on the moving averages of the MACD indicator which we may consider as evidence of bullish pressure. The price created a false break of this psychological level, respected it, and is currently moving higher.
Looking at the daily chart we could see that the price which is moving higher has created a continuing bearish divergence. This continuing bearish divergence is formed between the first high that has formed on 30th April 2020 and the second high that has formed on 20th April 2020 based on the histogram of the MACD indicator, which we may consider as an evidence of bearish pressure. Based on all this we may now expect short term retraces and then further continuation higher.
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Thank you I appreciate you and your group god bless you
Thank you!