Cotton at an important resistance zone

Cotton has been in a very sustainable bullish trend since the beginning of last year as we can see on the weekly chart of the July contract. The 55 week EMA (purple line) has crossed above the 200 week EMA (blue line), confirming a golden cross, which has bullish implications in the longer term. Therefore, the price of cotton may continue higher, even though it may try to stall at the 80.00 level, which could act as resistance. The current weekly candle has the shape of a “hammer” with a long lower shadow, which is showing us that the bulls have taken control of the market and may try to take the price higher, maybe above the 80.00 level. If the price breaks above the 80.00 level, then its next resistance may be the 85.00 level. In case the price of cotton retraces to the downside, then the 73.29 level may act as support, followed by the 200 week EMA at the 69.00 level.