Good morning Traders!
The price a chocolate treat may be on the rise as Cocoa prices continue to trade higher.
New York Cocoa
The market is in an uptrend on the Daily and the Weekly charts. And after a strong push to a new Higher High on both the Weekly and the Daily charts, the market is currently overextended from it’s Moving Averages.
Drawing the Fibonacci retracement of the latest Daily move has the previous Weekly Swing High at around the 3075 area, nesting between the 50% and the 61.8% retracement.
I am looking for a pullback to release some of this strong buying pressure and to bring the market closer to it’s Moving Averages. I’ll then be looking for signs that the pullback is over and that the market is ready to charge higher once again, and potentially test the next Resistance area at around the 3235.
Keeping in mind that the Monthly chart is very overextended, and we may experience a further pullback in the context of the Monthly chart. The area then that I will be looking for a potential long reversal would be the previous Monthly highs at around the 2950 area.
Happy Trading!
