Coffee Higher Low (D)
Created on Wednesday, 04 May 2016 23:27
Written by Austin Galt
The expectation is the downtrend in the coffee price has ended and we are looking for a higher low to form. I believe that just occurred with an intraday low at $118.90.
Let’s review the daily chart.
COFFEE DAILY CHART
The horizontal line denotes the previous swing high which price recently surpassed thereby creating a higher high. I believe we now have a higher low in place and a new bull trend in play.
I have added Fibonacci retracement levels of the first leg higher and this low has clipped the 61.8% level which is a common setup for higher low. If price were to trade lower, then the 76.4% level would come into play.
I have drawn a Fibonacci Fan which is the same fan I used in analysis produced back in March 2016 which was used to bring in the higher high. That analysis called for a higher low back at the 88.6% angle and that is exactly where price currently finds itself.
The RSI and MACD indicators both show bullish divergences at this low.
So, I believe conditions are now excellent for price to turn back up and trade much higher with high targets outlined in previous longer term analysis.