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?

Did you know that you have at your disposal the Technical Ideas Lookup tool from Trading Central to find trading ideas in cotton futures and in thousands of different instruments?

Start your free download by clicking on the banner below:

INFORMATION ABOUT ANALYTICAL MATERIALS:

The given data provides additional information regarding all analysis, estimates, prognosis, forecasts, market reviews, weekly outlooks or other similar assessments or information (hereinafter “Analysis”) published on the websites of Admiral Markets investment firms operating under the Admiral Markets trademark (hereinafter “Admiral Markets”) Before making any investment decisions please pay close attention to the following:

1. This is a marketing communication. The content is published for informative purposes only and is in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.
2. Any investment decision is made by each client alone whereas Admiral Markets shall not be responsible for any loss or damage arising from any such decision, whether or not based on the content.
3. With view to protecting the interests of our clients and the objectivity of the Analysis, Admiral Markets has established relevant internal procedures for prevention and management of conflicts of interest.
4. The Analysis is prepared by an independent analyst, Javier Olivan (analyst), (hereinafter “Author”) based on their personal estimations.
5. Whilst every reasonable effort is taken to ensure that all sources of the content are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admiral Markets does not guarantee the accuracy or completeness of any information contained within the Analysis.
6. Any kind of past or modeled performance of financial instruments indicated within the content should not be construed as an express or implied promise, guarantee or implication by Admiral Markets for any future performance. The value of the financial instrument may both increase and decrease and the preservation of the asset value is not guaranteed.
7. Leveraged products (including contracts for difference) are speculative in nature and may result in losses or profit. Before you start trading, please ensure that you fully understand the risks involved.