European rapeseed for February 2020 delivery continues to climb a wall of worry, posting gains on Monday and Wednesday of this week, followed by modest losses on Tuesday and Thursday. Thursday's trade resulted in a EUR.50 loss, while failing at the resistance of Wednesday's high. Thursday's move was despite euro weakness, which fell against the United States dollar for the third time in four sessions.
Despite this cautious move higher, the February contract is showing the potential for a third higher weekly close and the continuation of a "V" recovery which began on Oct. 22. This week's gains over four days have already matched the largest weekly gain seen over the life of the contract.
Nearby resistance on this chart is seen at September highs ranging from EUR389.75 to EUR390.50, daily highs reached from Sept. 20 to Oct. 9. A breach of this level will likely result in a continuation to the EUR392.75 contract high reached on Sept. 17. A look at the continuous active chart indicates that a move above this level would result in a test of retracement resistance at $395.19/mt, the 61.8% retracement of the move from the January 2017 high to April 2018 low.
The lower-study shows the February/May spread closing at a bullish inverse of EUR3, down from EUR3.25 reported on Wednesday. On this particular date over the past five years, this spread was shown as inverted (February trading over the May) in two of the five years, while on average, traded at a minus EUR0.85 carry.
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