Comment: Last week front month Cotton futures closed well above 50% Fibonacci retracement resistance and at the highest price since August last year, just above 63.00 cents per pound which is the mean of the last thirty-five years. Moving averages have helped the contracts along nicely since April this year and have allowed this one to break and hold above what had been a massive Ichimoku ‘cloud’. Momentum is yet to turn truly bullish and we are fractionally overbought, so allow for a little more hesitation between 65.00 and 72.50. A sustained break above here targets 76.50 cents which is one standard deviation from the mean of the last 25 years. Depending on the value of the US dollar, and interest gathered on the way up, there is a good chance that we shall see an extension to the 90.00/100.00 area, a regular feature of this fibre.

A weekly close well below 63.00 would postpone all of the above and below 55.00 would force a re-think.