• Cotton reversed from resistance area
• Further losses are likely
Cotton recently reversed down from the resistance area lying between key resistance level 0.9600 (which also reversed the price with the daily Japanese candlesticks reversal pattern Shooting Star in May), upper daily Bollinger Band and the resistance trendline of the daily up channel from 2017.
The downward reversal from this resistance area started the active short-term correction 4, which belongs to the medium-term impulse wave (5).
Given the bearish divergence on the daily Stochastic indicator – Cotton is likely to fall further and re-test the next round support level 0.9000 (low of the previous minor correction 2).