NY 2nd Month Sugar Futures
NY sugar futures edged lower yesterday as moderate selling pressure triggered a close at 17.88. The stochastics are falling, with the %K/%D about to converge on the downside, and the MACD diff is positive and converging. A break of the 10 DMA at 17.87 could trigger losses through support at 17.62, with the tertiary level at 17.48. On the upside, a break above previous sessions’ highs at 18.17 and 40 at 17.95 could set the scene for a test of 18.17, pointing to a change of trend for more bullish momentum. Yesterday’s small candle body points to market indecisiveness about the outlook for lower prices, however, the futures have found both robust support and resistance levels at moving averages that are converging. The indicators are suggesting further downside momentum, but with a lack of a strong signal, we expect the futures to continue to trade range-bound.
Ldn 2nd Month Sugar Futures
Lnd sugar prices gained ground yesterday appetite for prices below 10 DMA struggled, triggering a close at 543.00. The stochastics favour the downside, with the %K/%D stochastic diverging on the downside, suggesting we could see prices fall in the near term. The MACD diff just converged on the downside, suggesting a strong sell signal. Indeed, today’s candle gapped lower, opening at 505.20, the level not seen since early August, as the bear opened the market trading. With that in mind, we could see the prices edge back up to 512.90 as prices settle. On the downside, if the momentum persists throughout the day, the futures can test 500 and then 487.60.
NY 2nd Month Coffee Futures
NY coffee futures edged lower yesterday as intraday trading saw prices test support at 212.60. The market closed at 216.40. The RSI is falling, while %K/%D is seen diverging on the downside in the oversold. The MACD diff is negative and diverging. The indicators suggest further declines in the prices. On the downside, in order to confirm the rejection of the support, prices need to take out 212.60. A break below this level towards 209.65 would confirm the bearish momentum. Conversely, appetite for prices back above the 40 and 100 DMA at 220 could trigger a test of resistance at 10 DMA at 222.26. A small candle body after the three bearish candles signals uncertainty about the outlook for lower prices, and with the indicators being oversold, we expect the downside momentum to stall in the near term.
Ldn 2nd Month Coffee Futures
Ldn coffee futures held their nerve yesterday, as intraday trading prompted a test of 2215. The market closed at 2226. The stochastics are falling, about to enter the oversold, and the MACD diff is negative and diverging on the downside, suggesting further bearish momentum in the near term. The prices have been supported above 2215 in recent weeks, and the fall below this level could trigger losses through 40 DMA at 2172 and 100 DMA at 2100. On the upside, a breach back above the resistance at 10 DMA at 2242 would bring into play the recent firm resistance of 2281, confirming an inverse hammer formation. The indicators point to lower prices in the near term, but we need to see a break of 2000 to confirm the trend.
NY 2nd Month Cocoa Futures
NY cocoa futures strengthened yesterday as protracted buying pressure prompted a test of the 40 DMA level to close at 2368. The stochastics have converged on the upside, as %K/%D left the oversold territory, highlighting growing buying pressures. The MACD diff is negative and converging. To confirm another bullish candle, futures need to close above 40 DMA at 2383 and then target the robust trend resistance at 2392. On the downside, the break below 2314 could set the scene for lower prices towards the support of 2236, confirming the descending triangle. However, the market struggled below that level in recent sessions, and the bullish engulfing pattern suggests a strong buy signal. We believe that prices will strengthen in the near term, however, the trend is pointing to a price softening in the longer term.
Ldn 2nd Month Cocoa Futures
Ldn cocoa futures rallied yesterday as protracted buying pressure triggered a close above 1850 at 1868. The RSI is still falling, while %K/%D is diverging on the downside after nearly converging. The MACD diff is negative and diverging, confirming that the buying pressures might not be sustainable. On the downside, a break below the key support level of 1815 could trigger losses back towards 50 DMA at 1803, a break below which would confirm the outlook of lower prices in the longer term. On the upside, a complete break above 1850 could trigger gains through 1884 towards 1900. A long candle body points to a strong upside momentum yesterday, but with the indicators continuing their trend on the downside, we expect the futures to fall back below 1850 once again.