NY 2nd Month Sugar Futures
NY sugar futures edged lower yesterday, but futures struggled below the 100 DMA of 20.01 once again, closing just above 19.98. The stochastics are falling, as %K/%D is seen converging on the downside, sending a strong sell signal. Likewise, the MACD diff is positive and about to converge on the downside, which would amplify the sell signal. To confirm the bearish indicators and rejection of prices above the 10 DMA, futures need to break below the 100 DMA before targeting 19.50. On the upside, futures need to close above the 10 DMA and 40 DMA, respectively, to confirm the outlook for higher prices towards 20.76. Longer wicks point to a growing appetite for prices outside of current levels; however, the 100 DMA seems robust in the meantime. Prices need to be taken out at this level to confirm the outlook for lower prices.
Ldn 2nd Month Sugar Futures
Prices weakened yesterday as moderate selling pressure triggered a close just above the key 100 DMA support of 548.26; the market closed at 548.80. The stochastics are falling; %K/%D is about to converge back into the oversold, signalling a potential change in trend on the downside. The MACD is negative and diverging. The long candle body also suggests a growing downside appetite. To confirm this, prices need to break below the current support at 100 DMA at 548 and then 540.20. Conversely, a break back above the trend support at 558 could set the scene for a test of 560. We expect prices to continue to weaken and remain on the back foot.
NY 2nd Month Coffee Futures
NY coffee futures opened higher day-on-day but struggled to break above the robust psychological resistance at 300 and closed at 295.70. The stochastics continue to diverge on the upside, but the appetite for higher prices is not strong, and the MACD diff is seen slowing on the upside. Prices then need to take out the 300 level to confirm the bullish momentum to 310. Conversely, appetite for prices back below 290 could trigger a test of support of 280. A dragonfly doji candle shows rejection of higher prices above 300 and could point to the start of a bearish sentiment in the near term. To confirm this, the support at 280 needs to be broken below first.
Ldn 2nd Month Coffee Futures
Ldn coffee futures opened higher yesterday, but resistance at 4800 caused futures to close lower on the day at 4787. The stochastics have just crossed on the upside and are now rising further into the overbought, and the MACD diff is positive and converging. On the downside, a break of 4664 could trigger losses through 40 and 200 DMAs at 4630, with the tertiary levels at 4500. On the upside, a break above 4800 could set the scene for bullish momentum towards 5000. The candle closing lower on the day could be a sign that futures found robust resistance at current levels. Indeed, the indicators point to a decelerating downside momentum. To confirm this, the robust level at 4664 has to be taken out first.
NY 2nd Month Cocoa Futures
NY cocoa futures held their nerve yesterday as futures struggled above the 38.2% fib level at 8773 once again, prompting a close jump below at 8635. The stochastics remain elevated; %K/%D is rising further into the overbought, while the MACD diff is positive and converging, painting a mixed picture. To confirm the outlook for lower prices, futures need to close back below the support of 10 DMA at 8079 and then target 100 DMA at 7624. The 10 DMA is starting to close in and support prices from the downside. On the upside, the rejection of prices above 8773 indicates a robust resistance at that level. However, if this level is broken above, it would confirm the upside trend to 9000. Narrow-bodied candles in the last couple of sessions point to market uncertainty, and the futures need to break out of current resistance/support to confirm the longer-term outlook.
Ldn 2nd Month Cocoa Futures
Ldn cocoa futures edged higher yesterday, breaking above resistance at 7000 and closing at 7084. The stochastics are trading in the overbought territory, and the MACD diff is positive and flat, outlining recent bullish sessions. On the upside, futures need to break completely above 7100 in order to confirm upside momentum. The reaffirmation of support here could trigger gains towards the level at 7348; this could strengthen the trend on the upside in the long run. A break back below the current support at the trend support at 7000 would bring into play the 10 DMA level at 6506, which could set the scene for support at 6000. We expect prices to edge higher in the near term, highlighted by recent bullish momentum and positive indicators; however, futures need to close above the current resistance of 7348 to confirm the outlook for higher prices in the long term.
