NY 2nd Month Sugar Futures
NY sugar futures rallied yesterday as protracted buying pressure triggered a close on the front foot at 18.15. The %K/%D is diverging on the upside in the overbought. The MACD diff is positive and diverging, outlining recent market growth. On the downside, a break back below the support level of 17.71 could trigger losses back towards 17.00. On the upside, a break above the robust resistance at 40 DMA at 18.15 could trigger gains through resistance towards 18.00 and 19.00 – December 2014 highs. The market rally was strong yesterday, but the 40 DMA resistance is robust. This level has to be breached first to suggest a continuation of the upside momentum. We expect futures to retest this level and potentially breach it today.
Ldn 2nd Month Sugar Futures
Ldn sugar futures consolidated yesterday, breaking above resistance at 40 DMA and closing at 511.60. The stochastics are edging further in the overbought territory, and the MACD diff is positive and diverging on the upside, suggesting the futures still more room to go. On the upside, futures need to break completely above 512.60 in order to confirm upside momentum. The reaffirmation of support here could trigger gains towards the level at 520; this could strengthen the trend on the upside in the long run. A break back below the current support of 10 DMA at 497.22 would bring into play 493.80, which could set the scene for lower prices. We see prices edge higher in the near term.
NY 2nd Month Coffee Futures
NY coffee futures softened marginally yesterday as intraday trading saw futures struggle above the trend resistance. This level held firm, and futures closed below at 377.40. The stochastics are overbought, but %K/%D is seen converging on the downside. Likewise, the MACD diff is positive and converging, signalling growing selling pressures. To confirm the outlook for lower prices, futures need to break out of the current trend, which could set the scene for futures to take out the 360 level before the 10 DMA at 356.96. On the upside, if futures take out the trend resistance again, then it could set the scene for new highs towards 380 and 390. A longer upper wick on yesterday suggests waning buying pressure; we could see the bears’ strength grow in the near term.
Ldn 2nd Month Coffee Futures
Ldn coffee futures held their nerve yesterday as intraday trading saw prices close at 5548. The %K and %D are falling out of the overbought, sending a strong sell signal. The MACD diff is positive and converging, suggesting some appetite for lower prices, but futures need to break below the 5500 level first. A break below this level towards 5369 would confirm the continued bearish momentum. Conversely, appetite for prices above 5569 could trigger a test of regression resistance of 5750. The candle struggled to break below the near-term support, but the gravestone doji candle is usually a signal of growing downside momentum. If futures can break below the 5500, that would confirm the bearish indicators in the near term.
NY 2nd Month Cocoa Futures
NY cocoa futures held their nerve yesterday, causing the market to close at 10865. The stochastics are falling, with %K/%D diverging on the downside, and the MACD diff is negative and diverging, suggesting lower prices in the near term. To confirm the outlook for lower prices, futures need to close back below the 40 DMA at 10797 and then target 10000. The 10 DMA is closing in and resisting prices from the upside. However, a break above that level could set the scene for 11500. The narrow candle body with longer lower wicks points to a lack of appetite on the downside. We expect futures to retest the 40 DMA support level today.
Ldn 2nd Month Cocoa Futures
Ldn cocoa futures held their nerve yesterday as intraday trading caused the market to close above the 40 DMA at 8694. The stochastics are falling, with %K/%D weakening, and the MACD diff is negative and diverging, suggesting lower prices in the near term. To confirm the outlook for lower prices, futures need to close back below the 40 DMA at 8669 and then target 8300. On the upside, the rejection of prices below the 40 DMA could trigger gains back towards the 10 DMA at 8970. Narrow-bodied candles in the last couple of sessions point to market uncertainty, and the futures need to break out of the current range to confirm the longer-term outlook.
