IFC Markets Analytics

[IFCM]

Considering buying Corn

We would like to draw your attention to the CORN futures H4 chart. In the previous overview we pointed out that increase and decrease were equally probable. Eventually, due to the strengthening dollar, corn quotes declined but now they start growing again. We are considering buying the futures. This decision may be confirmed by the dropping dollar and estimated drought in the US. Grain crops may show a sharp growth in the future because of the potential onset of El Niño this year. Competent weather agencies haven't released forecasts yet but anything is possible. We remind that El Niño was last seen in 2010. The natural phenomenon boosted food prices back then. On March, 26 US Department of Agriculture (USDA) will publish a weekly report on food export. It may dramatically affect corn, wheat, soy, cotton and beef quotes.

Let us consider the CORN futures on the H4 time frame. It is traded in a mid-term range. The graph has recently shaped a triangle figure and continued moving down. However, there were no significant drop and corn returned into the neutral trend rather fast. RSI-Bars latest signals rebounded from the overbuy zone which is located above 70. At the same time the oscillator didn't breach 50. Donchian Channel expanded and the curve reached its upper boundary. The Donchian upper level is above 200-day moving average (MA 200). We do not rule out further bullish momentum if the latest bar of the CORN futures closes above the “old triangle” - 395. A pending buy order may be placed there. Stop loss may be placed at MA 200 level which can be considered as a support line – 387.9 mark. After pending order activation, 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. If the price meets stop loss level without reaching the order, we recommend cancelling the position: market sustains internal changes which were not considered.

Position Buy
Buy stop above 395
Stop loss below 387,9

Dear traders. For the detailed report of the strategy based on analytical issues of technical analysis click here.

 

[IFCM]

Expecting escape from 2-month range

Yesterday the data on growing February CPI were released in the US. In theory, it points to increased likelihood of interest rate hike, so the dollar stopped falling. However we do not rule out the downtrend and would like to draw your attention to the USD/CAD currency pair. Canadian GDP (YoY) in the forth quarter rose 2.4 as core CPI increased 0.6%. US Gross Domestic Product (Q4) will be released on Friday, analysts forecast 2.4% growth. According to yesterday's report, American CPI added 0.2% in February which is that that much, compared to Canada. Taking into account interest rates (0.25% in the US and 0.75% in Canada) we assume that the Canadian dollar may strengthen. To be mentioned, no important macroeconomic releases are expected in Canada. We believe that USD/CAD dynamics will determined by the news from the US.

USD/CAD has been traded in a range for 2 months on the D1 chart. Now it has moved to its lower boundary, traced by support line together with Parabolic and Donchian Channel. RSI bars indicates the bearish divergence: it is located below 50. USD/CAD deviated upward from the moving average. We do not rule out further bearish momentum if Doncian support and fractal low are breached at 1.2387: a sell pending order may be placed here. Stop loss may be placed below the average line between Donchian Channel and the local fractal low, which currently acts as support line - 1.2564. After pending order placing, Stop loss is to be moved every four hours near the next fractal high, following Parabolic signals. Thus, we are changing the probable profit/loss ratio to the breakeven point. If the price meets Stop loss level without reaching the order, we recommend cancelling the position: market sustains internal changes which were not considered.

Position Sell
Sell stop below 1,2387
Stop loss above 1,2564

Dear traders. For the detailed report of the strategy based on analytical issues of technical analysis click here.

 

[IFCM]

Report on crops

At 16:00 CET on Tuesday US Agricultural Service will release a report on crops evaluating wheat and corn reserves at state and private establishments (link). Investors are loking forward to this report because it will forecast future demand and may boost agricultural futures. Let us consider the consolidating continuous CORN futures on the H4 chart.

The price is in a range in prospect of the fundamental release. Doncian channel doesn't show an incline. The bullish momentum is confirmed by ParabolicSar, which has made a U-turn. Amid consolidation the oscillator signals should be carefully monitored. Despite the trend is keeping its direction, RSI-Bars has breached the support line (see the red mark on the figure above). That means that market is mixed: placing 2 opposite pending orders would be the best tactics. Let us allocate two key levels for that: 399.7 and 393.5. The upper level is confirmed by Parabolic historical signals and the Donchian channel boundary. The support at 393.5 is verified by the bullish “double bottom” pattern and Bill Williams fractals. When the long position is opened, we recommend to pay attention to the oscillator signals. If the ascending momentum is not confirmed by breaching the local overbought zone at 75%, we advise you to place a Stop loss at the break-even point.

When any pending order triggers, the opposite one should be canceled because market is choosing a direction. Stop loss is to be moved every four hours, following Parabolic signals. Thus, we are changing the probable profit/loss ratio for our benefit.

Position Sell
Sell stop below 393.5
Stop loss above 399.7

Position Buy
Buy stop above 399.7
Stop loss below 393.5

 

[IFCM]

Flat continues til Friday

Growing unemployment in February has been reported today in the EU. Deflation in March slipped but kept on track, driving the euro down. However, we believe that until the Friday Non-Farm Payrolls the common currency will be traded in a range. A number of important macroeconomic indices will be released in the US today: Chicago Purchasing Manager at 15:45 CET and Consumer Confidence at 16:00 CET. The tentative outlook is slightly positive for the American dollar.

The EUR/USD currency pair escaped the down-trend on the H4 chart and is now traded in a range: 1.1052 – 1.0461. The curve is a little bit below the corridor center and is moving towards the lower boundary. Thus, we do not rule out that until Friday the pair will reach the top or the bottom and rebound back to the middle. If RSI-Bars touches the overbought or the oversold zone that may confirm our assumptions. A sell order may be placed at the moving average – 1.1005. Stop loss may be placed at the Donchian Channel upper boundary and at the local fractal high – 1.1052. A buy order may be located at the flat corridor's bottom – 1.0461 with a stop loss slightly below (at 1.0431 for example). After pending order activation stop loss is to be moved every 4 hours near the next fractal, following Parabolic signals. Thus, we are changing the probable profit/loss ratio to the breakeven point. If the price meets stop loss level without reaching the order, we recommend cancelling the position: market sustains internal changes that were not considered.

Position Sell
Sell limit above 1,1005
Stop loss above 1,1052

Position Buy
Buy limit below 1,0461
Stop loss below 1,0431