After closing at $82.9 yesterday, ICE Cotton opened today at $83.1, to be greeted by bearish sentiment that overshadowing today's price action. Irrespective of the bearish mood, ICE Cotton retains a distinct $81.46 to $83.44 daily range.
Following today's trading session, chart analysis suggests Cotton could begin to recover as it approaches significant support, now 37 cents away from $81.11. Dipping below could be an indication that further losses are ahead. Technical analysis trend indicators suggest that the Cotton future made an initial break below its 5 day Simple Moving Average at $82.59, a possible indication of a forthcoming negative trend. Price action remains constrained around the key Fibonacci level of $82 currently serving as support. If price action breaks below, the next Fib hurdle is $80.1. Analysis based on the asset volatility indicates that Bollinger Bands® shows an indication of recovery: the lower band is at $79.49, a low enough level to, generally, suggest that the Cotton future is trading below its fair value.
All in all, the technical analysis suggests the Cotton future has no clear-cut direction.
In the meantime, negative performances are also seen in other Softs as Sugar retreats 0.92% to trade around $19.37.
Positive performances can be seen by looking at other Softs markets as Coffee gained 2.15% and is currently trading at $166.25. Having closed the previous session at $2,444, Cocoa is up 1.72% today to currently trade at around $2,486.
Having set a significant high of $154.89 25 days ago, Cotton is trading 15.14% lower.