COCOA : A CORRECTION IS DUE
- The market has been trading above a bullish trendline since mid-March ; The mid-term trend was then bullish
- More recently, the increased appetite for the US Dollar has started to put pressure on a wide range of commodities, including Cocoa.
Since the impact on 11,212, the control of the market has been taken over by sellers, leading prices back to their first support level around the 10,000 mark.
This pull-back following a bearish divergence with the RSI has driven the market to invalidate its mid-term bullish trend, opening the doors to a correction.
The RSI has also confirmed the bearish break-out, but remains in buying zone, slightly over the 50% level.
- The bullish trend has clearly been invalidated.
However, it is still hard to say whether the market consolidate laterally or register a deeper correction at this point.
Even if the 10,000 stays as the immediate support level for the market, 9,332 (38.2% Fibonacci + last market bottom) should be seen as a crucial zone.
If a break-out happens there, we could expect a deeper bearish movement towards 8,750 and 8,170 by extension.
Pierre Veyret, Technical Analyst at ActivTrades
The information provided does not constitute investment research. The material has no been prepared in accordance with the legal requirements designed to promote the independence of investment research and such is to be considered to be a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
- More recently, the increased appetite for the US Dollar has started to put pressure on a wide range of commodities, including Cocoa.
Since the impact on 11,212, the control of the market has been taken over by sellers, leading prices back to their first support level around the 10,000 mark.
This pull-back following a bearish divergence with the RSI has driven the market to invalidate its mid-term bullish trend, opening the doors to a correction.
The RSI has also confirmed the bearish break-out, but remains in buying zone, slightly over the 50% level.
- The bullish trend has clearly been invalidated.
However, it is still hard to say whether the market consolidate laterally or register a deeper correction at this point.
Even if the 10,000 stays as the immediate support level for the market, 9,332 (38.2% Fibonacci + last market bottom) should be seen as a crucial zone.
If a break-out happens there, we could expect a deeper bearish movement towards 8,750 and 8,170 by extension.
Pierre Veyret, Technical Analyst at ActivTrades
The information provided does not constitute investment research. The material has no been prepared in accordance with the legal requirements designed to promote the independence of investment research and such is to be considered to be a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
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