NY 2nd Month Sugar Futures
NY sugar futures held their nerve on Friday as a lack of appetite above 17.62 during urged the futures to close at 17.48. The stochastics continue to favour the downside, with the %K/%D diverging lower into the oversold, and the MACD diff just converged on the downside, a strong sell signal, suggesting that we could see downside momentum growing in the near term. Indeed, today’s candle broke below Friday’s support level, and, to confirm the indicators’ momentum, futures need to fall to 17.50 before 16.80. Alternatively, resistance at 10 and 40 DMA levels remain firm at 17.71, and a break above these levels would suggest a test of 18.00. We expect the downside momentum to prevail today.
Ldn 2nd Month Sugar Futures
Ldn sugar opened lower on Friday, but support at 495.80 held firm, causing futures to close higher day-on-day at 500.40. The stochastics are falling lower towards the oversold, and the MACD diff just converged on the downside, suggesting a strong momentum on the downside in the near term. To confirm this, the support at 495.80 needs to be broken first before testing the 487.60 level. On the upside, resistance at 505.40 and then 10 DMA at 506.80 are to be breached to set the scene for 512.90. Prices tested the support level once again today but we expect this level to break in the near term.
NY 2nd Month Coffee Futures
NY coffee futures edged marginally lower on Friday but still managed to regain some strength during the day, closing at 185.80. The stochastics remain oversold and struggle to point out the momentum as %K/%D is seen fluctuating; the MACD diff is negative and converging, suggesting that the downside momentum might be waning, and we might see a change of trend in the near term. The support at 182.50 has been tested and held on, but if the level is broken below, then the 180 level is the next level of support for the futures to test. Alternatively, if futures regain momentum back to 190.50, then this could set the scene for 10 DMA at 194.71. The downside wick has grown in recent trading sessions, suggesting the futures might find a bottom in the near term.
Ldn 2nd Month Coffee Futures
Ldn coffee futures weakened on Friday, closing slightly before the 2000 support at 1996. The stochastics are showing signs of convergence on the upside, as the %K/%D edges slightly higher in the oversold, and the MACD diff is negative and converging. On the upside, if the resistance at 2033 is broken above, futures could test the 10 DMA level at 2055 before 2100. On the downside, the support level at 1992 has formed in recent days, and a break below this level could trigger losses to 1950, the lows not seen since July. The downside momentum is seen slowing, and we expect the futures to settle at current levels before the trend change.
NY 2nd Month Cocoa Futures
NY cocoa futures softened marginally on Friday, as moderate weakness saw futures test appetite at 2300 before closing at 2312. The stochastics continue to fall further into the oversold, and the MACD diff is negative and diverging, highlighting the recent price weakness. To confirm the outlook for lower prices, futures need to break below the support at 2300 before 2236, confirming the descending triangle formation. On the upside, to regain upside momentum, it would have to trade back above 10 DMA at the 2333 level to 2345. We expect the futures to edge lower in the meantime.
Ldn 2nd Month Cocoa Futures
Ldn cocoa edged higher on Friday as intraday trading caused futures to test resistance at 1900 once again; the market closed higher at 1907. Stochastics have converged on the upside, and the MACD diff is negative and converging, suggesting strong upside momentum. To suggest a continuation of a trend on the upside, prices need to break fully above 1900 and then target 1930 before 1950. On the downside, the rejection of prices above 1900 could trigger losses back to 50 DMA at 1864, a break below which would suggest a change of trend. Buying pressure was weak on Friday, but the indicators are pointing to further upside momentum in the near term.