Technical Analysis – Soybean futures take a breather above 50.0% Fibonacci; buyers regroup

Anthony Charalambous, XM Investment Research Desk

US Soybean futures adopted a sideways market after a corrective move reversed the commodity back down to 8.82, which is the 50.0% Fibonacci retracement of the down leg from 9.2280 to 8.4070 and where the upper boundary of the Ichimoku cloud lies.

The short-term oscillators reflect a stall in momentum but lean more towards a push higher. The MACD is only just above its red trigger line in the positive zone, while the RSI is in the bullish territory, pointing upwards near the 50-level. However, price action is above the cloud and although the Tenkan-sen and Kijun-sen lines have turned horizontal, their positive signals are still intact. Moreover, the bearish cross of the 40-day simple moving average with the 100-day one could easily be reversed if buyers pick up again.

On the upside for the four-month peak of 9.2280 to be revisited, the bulls would need to reemerge, driving the price initially past a tough barrier where the 9.00 psychological hurdle and 76.4% Fibo of 9.03 lie. Succeeding could mean that the 9.37 resistance may be up for grabs, if the buyers persist past the 9.2280 high.

Moving lower, the bears face a very challenging Ichimoku cloud as it contains all sorts of obstacles, from the support of 8.80 that coincides with the 20-day SMA to the 40- and 100-day SMAs that have merged with the lower boundary of the cloud. If the bears prevail, the support of 8.51, which was tested multiple times over August could restrict further losses.

Overall, although the commodity remains rangebound, signals for higher levels overpower the bearish bias.