NY 2nd Month Sugar Futures
NY sugar futures sold off yesterday as a lack of appetite for prices above shorter-term DMAs prompted futures to break below the 100 DMA to close at 25.04. Today’s candle has already broken the 25.00 level, indicating a major trend reversal. The stochastics are falling, now oversold, and the MACD diff is negative and diverging, supporting the outlook for lower prices. A break of 25.00 support may pave the way for lower prices to 24.00 before 23.50. On the upside, if prices can take out the 100 DMA at 25.53 and then shorter-term DMAs, this would suggest that the recent trend was short-lasting. We believe that there is an appetite for lower prices in the near term, and prices will continue to break lower today.
Ldn 2nd Month Sugar Futures
Ldn sugar futures sold off yesterday as a lack of appetite for higher prices helped to break the 700 support; the market closed at 698.90. Stochastics converged on the downside while in the oversold, suggesting further selling momentum in the near term. MACD diff is negative and diverging, supporting the outlook for deteriorating prices. The last two days indicate a strong appetite on the downside. The sell-off yesterday and close near the lows suggest further selling pressure below the current support level, and the above-mentioned indicators support lower prices. A break below the 677 level could set the scene for a test of support at 655. On the upside, support around 700 would help reaffirm the bullish trend in the near term up to trend resistance. We believe that the market lacks conviction, and prices should continue to fall.
NY 2nd Month Coffee Futures
NY coffee futures skyrocketed in recent sessions, and yesterday, the protracted buying pressure triggered a close on the front foot at 184.70, the highest level since June. The %K/%D is diverging on the upside, about to enter the overbought territory. The MACD diff is positive and diverging, outlining the recent market rally. On the downside, a break back below the support level of 180 could trigger losses back towards 10 DMA at 173.07; a break below this level would confirm the outlook of lower prices in the longer term. On the upside, a complete break above 185 could trigger gains through resistance towards 190. The market rally has been strong, with a long-bodied candle with little shadow after the spinning top formation. We could see prices trend even higher today as a result.
Ldn 2nd Month Coffee Futures
Ldn coffee strengthened yesterday, as marginal buying pressure triggered a close on the front foot at 2546 but still struggled above the 2600 level. The stochastics are rising, with %K/%D diverging on the upside towards the overbought. The MACD diff converged on the upside. A long bullish candle body with no shadow suggests growing buying pressures; this could set the scene for higher prices to test the 2600 level today, but we struggle to see it breaking this level. On the downside, a breach of support at 100 DMA at 2446 would strengthen the bearish momentum. This could also trigger losses towards 2400. Indicators point to higher prices; however, futures need to break above 2600 to confirm the outlook.
NY 2nd Month Cocoa Futures
NY cocoa futures edged higher yesterday as prices closed at 4277. The indicators continue to favour the upside, with %K/%D overbought but now seen converging on the downside, and MACD diff positive and diverging, but the momentum is slowing, suggesting waning buying pressures. A break below 4200 would bring into play the recent support level at 10 DMA at 4137. In order to indicate an improvement of market sentiment on the upside, futures need to gain a footing above 4300 in the near term. The hanging man candle formation suggests waning buying pressure, and we saw futures struggle above 4300 in the last couple of sessions. Prices could edge slightly lower today.
Ldn 2nd Month Cocoa Futures
Ldn cocoa futures edged lower yesterday as prices tested the high of 3600 before closing below it at 3558. The indicators are softening, suggesting a waning appetite on the upside. The %K/%D is seen converging in the overbought area, suggesting softer buying pressures. A break below the 10 DMA at 3492 would bring into play the recent sessions’ trend support level; this would help confirm the hanging man formation. Prices have been relatively well supported above 10 DMA, and in order to indicate an improvement of market sentiment on the upside, futures need to gain a footing above the previous day’s highs at 3572 and then target the 3600 in the near term, a firm resistance level. The break above that resistance level would confirm the outlook for higher prices.
