NY 2nd Month Sugar Futures
NY sugar weakened on Friday, with the prices falling to the test at the 17.62 level once again; this level held firm, and the futures closed at 17.64. The indicators suggest that the downside momentum is growing: the %K/%D is seen converging on the downside, and the MACD diff is positive and converging, highlighting waning buying pressures. On the downside, the robust support level at 17.62 has to be broken below first before it can target 17.48 and 17.00, respectively. Alternatively, if the futures can gain momentum above the 10 and 40 DMA at 17.77 and 17.95, respectively, then we can see them retest the 18.17 level. The futures have been slowly edging lower in the last couple of weeks, and with the indicators suggesting growing downside momentum, we could see futures keep testing 17.62 as the sentiment weakens.
Ldn 2nd Month Sugar Futures
Ldn sugar futures held the nerve on Friday, as the support level at 495.80 held firm once again; the futures still closed lower day-on-day at 497.30. The stochastics are diverging on the downside further into the oversold, and the MACD diff is negative, but the downside momentum is seen as slowing as the indicator remains flat. This suggests that the bearish appetite we have seen in recent weeks has now waned and might reverse back in the near term. To confirm this, the futures would have to break above the 505.40 level before targeting the 10 DMA at 516.61 and 40 DMA at 519.54. On the downside, support at 495.50 has been robust in the last couple of days, and if this level is breached, we could see futures weaken to 487.60. The futures have been trading range-bound, and the indicators confirm the lack of momentum; we expect this to continue in the near term.
NY 2nd Month Coffee Futures
NY coffee futures softened on Friday after finding resistance at 10 DMA. The market closed at 214.10. The stochastics continue to soften, with %K in the oversold territory, and the MACD diff is negative and diverging, suggesting we could see lower prices in the near term through the support of 212.60. A break below this level would bring into play the 209.65 level, which could set the scene for support at 200 in the longer term. On the upside, futures need to gain back above the 10 DMA at 217.29 in order to confirm upside momentum. The reaffirmation of support here could trigger gains towards the level at 40 DMA at 220.98; this could strengthen the trend in the long run on the upside. Longer lower wick, where most of the trading took place in the upper ranges, points to traders testing the lower ranges, suggesting there is an appetite for lower level; however, prices need to break below the current support level to confirm the outlook.
Ldn 2nd Month Coffee Futures
Ldn coffee futures opened higher day-on-day but struggled to break above the resistance at 10 DMA and closed at 2232. The stochastics are diverging on the downside, but the appetite for higher prices is not strong, and the %K/%D is seen slowing on the upside. Likewise, the MACD diff is negative and converging marginally. Prices then need to take out the 2215 level to confirm the bearish momentum to 40 DMA at 2203. Conversely, appetite for prices above 10 DMA at 2231 could trigger a test of resistance of 2281. A dragonfly doji candle shows rejection of higher prices above 10 DMA and could point to a start of bearish sentiment in the near term. To confirm this, the support at 2215 has to be broken below first.
NY 2nd Month Cocoa Futures
NY cocoa futures sold off on Friday as a lack of appetite for higher prices helped to confirm the rejection of the robust support level at 2314; the market closed at 2244. Stochastics are negative and diverging on the downside close to the oversold, and the MACD diff is negative and diverging strongly, highlighting the recent sell-off in prices. The close near the lows suggests the strong selling pressure in the near term, and the indicators point to a growing negative trend. A break below the 2236 level could set the scene for a test of the support level at 2200. Conversely, support around 2236 holds; this could help reaffirm the trend on the upside. If the futures break back above the 2314 level, the prices could test the resistance at 10 DMA at 2339 in the medium term. The downside risks prevail, and a break below the key support highlights the strong bearish momentum.
Ldn 2nd Month Cocoa Futures
London cocoa futures held the nerve on Friday as the futures struggled below the 50 MA support and closed at 1839. The stochastics have converged on the downside and now falling, and the MACD diff is negative and diverging. A break of the 50 MA support at 1816 could trigger losses through 1800, with the tertiary level at 100 MA at 1785. On the upside, a break above 1850 could set the scene for bullish momentum towards the month high of 1884. The spinning top formation has been formed, which points to market indecisiveness, however, the indicators point to a growing downside momentum in the near term.
