NY 2nd Month Sugar Futures
NY sugar futures weakened slightly on Friday but struggled to break below the 10 DMA and closed at 18.41. Today’s candle opened below this level but is now once again seen testing the upper ranges. The stochastics are now converging on the downside, and MACD diff is negative and has remained flat in recent days. To suggest further downside pressures, the support of 10 DMA at 18.40 needs to be breached completely first before attempting to test the 18.17 level; the 100 DMA at 18.11 remains firm support. Alternatively, 40 DMA is seen capping prices on the upside at 18.59, and if this level is broken, this could set the scene for higher prices to 19.00. Friday’s longer lower wick on suggested that prices tested below 10 DMA but rejected it, and today’s lacklustre open suggests that we will see futures trend in the current range in the near term.
Ldn 2nd Month Sugar Futures
Ldn sugar followed suit, as it edged slightly lower on Friday, testing the support levels at moving averages; futures closed above those levels at 531.50. The stochastics are about to converge on the downside, and MACD diff is positive and converging. However, this morning’s activity points to an appetite for prices above the moving averages after it had opened lower 529 and is now continuing to climb. Futures have fluctuated around these levels in recent sessions, struggling to gain momentum, and the trading has been range-bound between the Bollinger support/resistance levels. To confirm the indicators’ momentum for lower prices, futures need to break the MA levels at 530 before testing the longer-term support level at 100 DMA at 520. Alternatively, if today’s upside pressures persist, we could see a break back above the current levels to 540. Candle bodies are getting thinner, suggesting a lack of conviction in either direction, and we expect futures to remain range-bound in the near term.
NY 2nd Month Coffee Futures
NY coffee futures held their nerve on Friday as prices struggled to break above the long-term resistance trendline, settling at 155.75. Futures have also found support at 10 DMA level, and the indicators point to higher prices in the near term. The stochastics are continuing to rise, and MACD diff just converged on the upside, underlying the near-term upside momentum. To confirm this, futures need to break above the resistance trend to test 160. This could set the scene for prices up to 40 DMA at 162.24. Alternatively, to suggest a lack of momentum on the upside, prices need to break below the 10 DMA at 153.47 before 150 and 143, respectively. The indicators point to growing upside momentum in the near term, but futures need to break the current resistance levels to confirm this.
Ldn 2nd Month Coffee Futures
Ldn coffee, saw momentum build in recent days, with Friday’s sessions jumping higher to close at 1944. The stochastics continue to gain in overbought, and the MACD diff is positive and diverging, suggesting we could see further gains before a trend reversal. Indeed, futures are seen testing the upper Bollinger band (UBB) level at 1955 in recent days, suggesting that we could see a slight change in momentum back to neutral levels. To confirm this, 1950 needs to hold today, and 1940 needs to be breached once again to 10 DMA at 1896. If, however, the upside momentum remains strong today, the robust levels on the upside are at 100 DMA at 1976 and then 2000. We expect prices to soften today.
NY 2nd Month Cocoa Futures
NY cocoa futures opened lower on Friday, but support at 40 DMA held firm, and futures closed higher on the day at 2594. The stochastics continue to fall rapidly, and the MACD diff is negative and diverging. Friday’s hammer formation pointed to prices rejecting the levels below the trendline and could, as a result, indicate the end of a recent downtrend back to higher levels to 2600 and then 10 DMA at 2636. On the downside, 40 DMA at 2559 remains firm and could provide continued support for prices in the longer term. We expect prices to gain momentum back above 2600 in the near term.
Ldn 2nd Month Cocoa Futures
Ldn cocoa weakened slightly on Friday, with prices falling as low as the 100 DMA level at 1930, but managed to close above that level at 1951. The stochastics are falling but showing signs of slowing, with %K tailing off on the upside. MACD diff is negative and continues to fall, highlighting the recent downside momentum. After the recent sessions’ market weakness, Friday’s candle point to a lack of appetite below the 1950 level. We expect futures to test this level today once again. At the same time, volumes are growing rapidly, suggesting higher conviction, and if the downside momentum prevails, we could see futures fall below the 100 DMA to 1900. Alternatively, if the 1950 level holds, we could see a further upside back to 50 DMA at 1969 before 2000. We expect prices to remain supported above 1950 today.