For this longer term view I have decided to use the Monthly Chart! Last Jan 2014 I noted how ‘…isn’t it interesting how we have almost a multiyear Double Bottom on the Monthly Chart above!’and that would not wish to comment beyond the 2008 high at 2.6216!
Well, both of those things have apparently come to pass with the Bullish DB being the underlying thread whilst the action in recent times had been activated by the 2012-to-date Bullish Channel and how it had finally seemed to overcome the 2.6216 high! I say seemed as there are some questions as yet but more on that later.
Firstly the DB – the target for that would be in the 3.6000 area but given the timescale I would not expect it until three or four years down the line. Nearby is the Bullish Channel – currently 2.2955 to 2.7648! Though the bullet point above was full bullish last time, we did not really move that way for some time.
In fact though Jan 2013 was bullish, we had a bear move in Feb that only petered out in Jun when the month made a Key Reversal Down but failed at the Lower Channel Line and saw the start of the current rally – for those of you who follow my Sugar Week London presentation made in Sep for Oct delivery (USDBRL then 2.2800ish), this was just before I suggested 2.6600 as a possible target for a try higher (to many readers amazement & some horror) which duly came about. My concern is that the Dec move hit the Upper Channel line and bounced back down significantly.
Admittedly, on the Weekly Chart we had a Bearish Shooting Star pattern three weeks ago and there has been no follow through, yet I am concerned that the rise may for the moment be tempered – it would not necessarily be a bad thing. However, once the bull incentive starts again then resistance will be at 2.8000, 3.0100, 3.2330 & then nothing till 3.8210 outside of the target for the DB! Support is at 2.6203, 2.4550, 2.3511 & the Lower Channel Line.
In fact, to negate the bullish thread we’d need consecutive closes below the Lower Channel line and to turn bearish we’d need consecutive closes below the Interim Double Bottom which was part of the current move higher at 2.1864! As a consequence, the bullet point above becomes slightly less bullish as we wait & see how the market deals with the Channel Lines!
ADM Investor Services International Limited is authorised and regulated by The Financial Conduct Authority. Member of The London Stock Exchange. Registered office: 4th Floor Millennium Bridge House, 2 Lambeth Hill, London EC4V 3TT. Registered in England No. 2547805 a subsidiary of Archer Daniels Midland Company. Risk Warning: Investments in Equities, CFDs, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value, investors should therefore be aware that they may not realise the initial amount invested, and indeed may incur additional liabilities.
These Investments may entail above average financial risk of loss, and investors should therefore carefully consider whether their financial circumstances and investment experience permit them to invest and, if necessary, seek the advice of an independent Financial Advisor. Some services described are not available to certain customers due to regulatory constraints either in the United Kingdom or elsewhere. © 2014 ADM Investor Services International Limited 2014.