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Cotton futures inch higher on firm technical outlook

April 17 (Reuters) - ICE cotton futures edged higher on Wednesday as the technical picture for prices improved, supported by optimism from progressing U.S.-China trade talks.

* The most-active cotton contract on ICE Futures U.S., July , settled up 0.4 cent, or 0.51 percent, at 78.96 cents per lb.

* "Prices are trading in a range. It finds support at the bottom and goes back up," said Jim Nunn, owner of Tennessee cotton brokerage Nunn Cotton, adding that the market is testing the 200-day moving average around 80.02 cents.

* Cotton prices traded within a range of 78.1 to 79.25 cents a lb during the session.

* Prices were trading above key technical levels including the 100-day moving average. Speculators who trade on technical signals regard a break above the 100-day moving average as a bullish sign.

* When prices break above 80 cents, it will pull prices higher like a magnet on speculative buying, boosted by U.S.-China trade talks and export numbers on Thursday, if good, Nunn said.

* The USDA will release its weekly export sales report on Thursday.

* Markets are hopeful that an end to the long-drawn trade war between the United States and China was near, after the U.S. Treasury Secretary said he hoped talks were approaching a final lap.

* "Optimism regarding U.S.-China trade talks and poor weather conditions have given a lift to most agricultural prices this year," analysts from Capital Economics said in a research note.

* Total futures market volume fell by 8,666 to 36,847 lots. Data showed total open interest fell 2,390 to 212,509 contracts in the previous session.

* Certificated cotton stocks <CERT-COT-STX> deliverable as of April 16 totaled 55,517 480-lb bales, up from 53,421 in the previous session.

(Reporting by Karthika Suresh Namboothiri in Bengaluru Editing by Matthew Lewis)