IFC Markets - Analytics

    IFC Markets

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    Technical Analysis #C-WHEAT : 2015-03-20

    Commodities up again

    Let us consider the continuous WHEAT futures on the H4 chart. The price gained the bullish momentum, driven by dollar weakening against commodities. The greenback declined as Janet Yellen, Fed chair, reported GDP forecast for this year to be cut to 2.3%. The next year estimates were reduced to 2.7%. Fractal highs are renewed while Donchian Channel inclines further. Parabolic historical values confirm the trend assuring us about the bullish movement.


    Despite the factors mentioned, controversial signals from RSI-Bars oscillator shouldn’t be disregarded. The bars are inside the consolidation zone which will give place to a new volatile momentum. As reflected by the main trend direction, we are likely to see a breach towards the green zone. That is why a pending buy order may be placed above fractal support 520.8 with Stop loss placed below support level 503.7. This mark is confirmed by the trend line, Parabolic historical values and Bill Williams fractal. The Hammer formation (marked with yellow) makes us more confident as well.
    Conservative traders are recommended to wait until RSI-Bars support is breached at 64.9766%. In this case the movement is confirmed by analytical instruments of any type, so the false breakout is less likely. After pending order placing, Stop loss is to be moved every four hours near the next fractal low, following Parabolic signals. Thus, we are changing the probable profit/loss ratio to the breakeven point.


    Position Buy
    Buy stop above 520.8
    Stop loss below 503.7

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