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Technical Analysis #C-COFFEE : 2017-04-20

Thu, Apr 20 2017, 01:26 GMT


Return of El Nino is bullish for coffee prices

Rising temperatures point to possibility of El Nino return, which may negatively affect coffee crops. Will coffee prices continue rising?


World coffee production is expected to recover this season unless ocean temperatures again rise later this year, enabling the return of El Nino. A return of El Nino will raise the possibility of coffee shortages again, though currently there is an oversupply as producers have plentiful stocks despite lower crop last year. Concerns El Nino may return as rising ocean temperatures point to increasing likelihood of such event are bullish for coffee prices.





On the daily chart COFFEE:D1 is rising after trading with negative bias since mid-January. It has breached above the 50-day moving average MA(50).



We believe the bullish momentum will continue after the price crosses above the upper Donchian bound at 145.89. It can be used as an entry point for a pending order to buy. The stop loss can be placed below the last fractal low at 139.46. After placing the pending order the stop loss is to be moved every day to the next fractal low, following Parabolic signals. Thus, we are changing the probable profit/loss ratio to the breakeven point. If the price meets the stop-loss level (139.46) without reaching the order (145.89) we recommend cancelling the position: the market sustains internal changes which were not taken into account.

Technical Analysis Summary


Position Buy
Buy stop Above 145.89
Stop loss Below 139.46

Published on Thu, Apr 20 2017, 01:26 GMT

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IFCMARKETS. CORP. 2006-2015 IFC Markets is a leading broker in the international financial markets which provides online Forex trading services, as well as future, index, stock and commodity CFDs. The company has steadily been working since 2006 serving its customers in 13 languages of 60 countries over the world, in full accordance with international standards of brokerage services.

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