NY 2nd Month Sugar Futures
NY sugar futures buckled last Friday as protracted selling pressure triggered a close on the back foot at 18.99. The stochastics are falling, and %K/%D is giving the sell signal, as it converged on the downside out of the overbought; the RSI is also falling. The MACD diff is positive and converging, confirming growing selling pressure; this could set the scene for lower prices below 40 DMA at 18.50, but futures need to break below 10 DMA at 19.06. A break below this level would confirm the outlook of lower prices down to 18.17 and 100 DMA. On the upside, a break back above the 19.50 resistance level and appetite for higher prices could set the scene for 19.69. Three-line strike formation could point to a continuation of an uptrend, but indicators suggest another decline today. If the reversal on the downside is not permanent, this would confirm the cup and handle formation, and we could see prices edge higher in the longer term. In the meantime, we expect further marginal downside in the near term.
Ldn 2nd Month Sugar Futures
Lnd sugar futures edged above the previous day's closing price last Friday, but the bullish momentum was not strong enough, and futures closed lower on the day at 549. The stochastics continue to rise yet are seen converging; the MACD diff is positive, but the upside momentum is slowing. The rejection of prices at 552.40 has formed a candle with a narrow body but a longer wick on the upside, suggesting a lack of appetite for higher prices. If prices were to break above this level, this could trigger a test of 560. Alternatively, to confirm the shooting star formation, futures need to take out 540 and then robust support at 10 DMA at 536.55. A break below this level would confirm the outlook for lower prices and a double-top formation in the longer term.
NY 2nd Month Coffee Futures
NY coffee futures weakened last Friday as futures failed into the trend resistance and closed at 166.75. The stochastics began to decline as they emerged from overbought; we also saw a sell signal materialise. The MACD diff is positive and converging, pointing to a waning buying pressure. A break below 10 and 40 DMAs at 168.02 and 165.48, respectively, would confirm the outlook for lower prices. This may pave the way for lower prices to 160, the longer-term support level. Conversely, the reaffirmation of support above the moving averages would suggest higher prices and a close above 174.35, setting the scene for higher prices towards 180. Friday's candle body struggling above the longer-term trend resistance suggests a continued weakness, but with prices being propped up by moving averages, we could see the range tighten further in the near term.
Ldn 2nd Month Coffee Futures
Ldn coffee futures edged higher last Friday after prices failed above the near-term resistance once again and closed at 1875. The stochastics have converged on the upside recently but have become flat since then, suggesting a lack of momentum on the upside. The MACD diff is positive and continues to converge, pointing to prevailing price weakness. On the downside, futures need to break below the support of 10 DMA at 1873 completely in order to confirm the outlook of lower prices. This could trigger further losses towards 40 DMA at 1847. Conversely, the reaffirmation of support at current levels could set the scene for higher prices back to 1882, but this level has not been broken in recent weeks. We expect the narrow trading range to prevail in the meantime as prices continue to test the near-term resistance levels.
NY 2nd Month Cocoa Futures
NY cocoa futures held their nerve last Friday as intraday trading saw prices close at 2634 as it struggled to gain momentum above 2662. The RSI is rising, and %K/%D is edging higher and is now overbought. The MACD diff is positive and diverging strongly, suggesting an appetite for the upside is growing, but to suggest appetite for higher prices, the futures need to break above the near-term resistance level to trigger the momentum. A break above this level towards 2700 would confirm the growing bullish momentum. Conversely, appetite for prices below the 2600 level could trigger a test of support at 10 DMA at 2547. A gravestone doji candle shows rejection of higher prices as futures struggle above that level. This candle after the three white soldiers' formation could signal the end of the uptrend, and with stochastics being overbought, we could see upside momentum slow in the near term.
Ldn 2nd Month Cocoa Futures
Ldn cocoa strengthened last Friday as protracted buying pressure triggered a close above the trend resistance at 1985. The stochastics are rising, with %K/%D diverging on the upside towards the overbought. The MACD diff converged on the upside, creating a strong buy signal. However, a narrower bullish candle body after a three white soldiers' formation continued buying pressures; this could set the scene for higher prices to break above the 2000 level. This would confirm the trend for rising prices up to 2050. On the downside, a breach of support below the trend line to 1950 would strengthen the bearish momentum. This could also trigger losses towards the 50 DMA at 1943. Indicators point to higher prices, and Friday's break above the trend resistance could signal further upside in the longer term and confirm the pennant formation.