CATTLE: Technical Analysis – The number of cattle is rising in the US

By IFCMarkets

The number of cattle is rising in the US

According to the US Department of Agriculture, the maximum number of cattle was sent to US feeding grounds in June since 2006. Will Fcattle prices fall?

In June 2018, the number of cattle heads directed to feeding grounds was 1.793 million. This is by 1.3% more than in June of the last year. As a result, the total number of cattle in US feeding grounds at the beginning of July 2018 increased by 4.3% and reached the maximum since 1996 – 11.282 million. The total number of cattle in the US increased and on July 1, 2018 reached 103.2 million heads against 102.2 a year ago.

On the daily timeframe, Fcattle: D1 breached down the support line of the uptrend. An increase in the number of cattle in the US can contribute to the further price decrease.

• The Parabolic indicator gives a bearish signal.
• The Bollinger bands have narrowed, which indicates low volatility. They are titled downward.
• The RSI indicator is below 50. It has formed a negative divergence.
• The MACD indicator gives bearish signal.

The bearish momentum may develop in case Fcattle falls below its last low at 149. This level may serve as an entry point. The initial stop loss may be placed above the last fractal high, the 8-month high and the Parabolic signal at 155. After opening the pending order, we shall move the stop to the next fractal high following the Bollinger and Parabolic signals. Thus, we are changing the potential profit/loss to the breakeven point. More risk-averse traders may switch to the 4-hour chart after the trade and place there a stop loss moving it in the direction of the trade. If the price meets the stop level (155) without reaching the order (149), we recommend to close the position: the market sustains internal changes that were not taken into account.

Summary of technical analysis

Market Analysis provided by IFCMarkets