NY 2nd Month Sugar Futures
NY sugar futures held their nerve on Friday as intraday trading saw futures test appetite at 18.00 once again. This level held firm, and futures closed at 18.05. The stochastics are converging on the upside, confirming the end of the bearish cycle. The %K/%D is about to converge on the upside in the oversold territory, sending a strong buy signal, and the MACD diff is negative and converging, signalling waning selling pressures. To confirm the outlook for higher prices, futures need to break back above the resistance at 18.50, which could set the scene for the 10 DMA level at 18.84 level before targeting 19.00. On the downside, the market needs to take out support of 18.00 and then robust support at 17.89. The candle found support above these levels, and the indicators signal the end of the bearish trend that has been seen in recent days. We expect futures to hold above the 18.00 level in the near term.
Ldn 2nd Month Sugar Futures
Ldn sugar futures held their nerve on Friday as prices remained below the 512.60 level, closing at 510.10. The stochastics are converging on the upside out of the oversold, and the MACD diff is negative and converging, suggesting waning selling pressures in the near term. To confirm the indicators and rejection of prices below 500, futures need to take out 512.60 once again and then target 519. This could set the scene for the 10 DMA at 527.73, confirming the outlook for positive momentum. On the downside, futures need to close 510 and 500, respectively, in order to confirm the outlook for lower prices towards 493.80 – the August low. Short wicks and a bearish candle point to a stalling appetite for lower prices. We expect futures to find support at current levels before seeing a moderate recovery in the near term.
NY 2nd Month Coffee Futures
NY coffee futures edged lower on Friday, but support at the regression trend resistance prompted a moderate correction to 319.30. The stochastics are falling, with the %K/%D edging closer to the oversold territory; the MACD diff is negative and diverging. A break of the trend resistance at 315 could trigger losses through 304.09, with the secondary level at 300. On the upside, a break back above the 10 DMA at 324.78 could set the scene for a test of previous highs at 340, pointing to a change of trend back for more bullish momentum. Friday’s bearish spinning top formation points to market indecisiveness about the outlook for lower prices, and futures need to break the trendline to confirm the outlook.
Ldn 2nd Month Coffee Futures
Prices weakened on Friday as moderate selling pressure triggered a close just above the 5000 support level at 5002. The stochastics are falling, signalling a continuation of a bearish trend. The MACD lacks conviction, and the small candle body supports market indecisiveness. Dips in the market have not been well bid in the last couple of sessions, so in order to confirm the continuation of the bearish momentum, prices need to break below the current support of 5000 and then the regression trend support at 4990. Conversely, a break above the 10 DMA resistance line at 5143 could set the scene for a test of 5250. We expect prices to remain supported above the 40 DMA support level in the near term.
NY 2nd Month Cocoa Futures
NY cocoa futures opened lower on Friday but found the strength during the day to close higher on the day at 11163. The %K/%D is falling out of the overbought. The MACD diff is positive and converging, suggesting growing selling pressures. The indicators point to lower prices in the near term, and to confirm the rejection of the support, prices need to take out the 10 DMA at 11051. A break below this level towards 10260 would confirm the strong bearish momentum. Conversely, appetite for prices above the 11500 level could trigger a test of 12000. A spinning top candle after a bearish candle signals uncertainty about the outlook for trend reversal on the downside, and a break below the key resistance at 10 DMA would confirm there is more appetite for the downside.
Ldn 2nd Month Cocoa Futures
Ldn cocoa futures opened lower yesterday but consolidated during the day, testing support at the 10 DMA. The market closed at 8952. The %K/%D is falling out of the overbought. The MACD diff is positive and converging, suggesting growing selling pressure. The indicators point to lower prices in the near term, and to confirm the rejection of the support, prices need to take out the 10 DMA at 8747. A break below this level towards 8500 would confirm the strong bearish momentum to 8000. Conversely, appetite for prices back above the 9000 level could trigger a test of trend resistance. A spinning top candle signals uncertainty about the outlook for lower prices, and if futures continue to struggle above 9000, we could see prices edge lower in the near term.
