NY 2nd Month Sugar Futures
NY sugar jumped higher on Friday, breaking above the 19.50 resistance to close at 19.61. The robust level at 19.64, however, held firm, and today’s candle is struggling to break above that level. The stochastics are diverging further into overbought, and the MACD diff is positive and diverging, highlighting recent upside pressures and the three soldiers’ formation. We expect futures to struggle to breach 19.64, and to confirm the trend reversal, futures need to break below 19.21 before 10 DMA at 18.85. Alternatively, following the near-term resistance level at 553.20, the next level on the upside is at 20.00. We expect futures to edge slightly lower in the near term, forming the double top formation at current levels.
Ldn 2nd Month Sugar Futures
Ldn sugar futures strengthened on Friday as protracted buying pressures triggered a close at 553.50. The stochastics are seen converging on the downside out of overbought, and the MACD diff is positive and diverging, but the upside momentum is slowing. Futures struggled above 553 in recent months, and if the trend reverses on the downside, this could confirm the triple top formation and could prompt a test of the 10 DMA at 539.20. On the upside, if near-term resistance is broken, this could set the scene for higher prices to 560 and 564.50. Indicators and today’s rejection for higher prices highlight a lack of appetite for higher levels, and we could see a change of trend in the near term.
NY 2nd Month Coffee Futures
NY coffee futures continued to edge higher last week, with Friday’s close at 170.05, the 11th consecutive price gain. The stochastics are rising further into overbought, but momentum is slowing, and the MACD diff is positive and diverging, suggesting that we might see some further upside before a trend change. The next robust level on the upside is at the Upper Bollinger band (UBB) at 172.48, with 100 DMA at 180.27 next in line. The moving averages are all supporting prices, and the 10 DMA is about to break above the 40 DMA, which is a traditionally bullish signal. If futures break below the 40 DMA at 165.53, then they could test 10 DMA at 159.10. We expect prices to continue edging higher to UBB before seeing slowing momentum on the upside.
Ldn 2nd Month Coffee Futures
Ldn coffee futures rallied on Friday, breaking above the robust resistance of 100 DMA to close higher at 2016. The stochastics, however, point to a strong sell signal, with %K/%D converging on the downside out of overbought, and MACD diff is positive and flat following the recent uptrend. To confirm this, futures must break below 2000 before attempting to retest the 100 DMA at 1962. Alternatively, if support at 2000 holds, we could see prices strengthen further into 50% fib at 2062 before 2100. The indicators are highlighting a strong sell signal in the near term, and we expect futures to soften back to 100 DMA.
NY 2nd Month Cocoa Futures
NY cocoa futures continued to test the 2671 resistance level on Friday but struggled above it and closed at 2660. The stochastics are positive and diverging, and the MACD diff is negative and converging, highlighting waning downside pressures. Indeed, trendline is supporting prices on the downside, but futures also continue to struggle above 2671, creating a tight trading range. The candles have formed an ascending triangle, and to confirm this formation, futures must first break 2671 before attempting to test 2700. Alternatively, if futures continue to struggle above this level, we could see some downside momentum to 10 DMA at 2634 and 2600, respectively. We expect the recent upside momentum to prevail, but futures will continue to test 2671 in the near term.
Ldn 2nd Month Cocoa Futures
Ldn cocoa futures tested the 2015 level once again on Friday but struggled above, closing lower at 2013. The stochastics are diverging on the upside closer to overbought and MACD diff is positive and diverging, highlighting the recent upside momentum. The near-term resistance level has been robust throughout January, and a break above this level could trigger gains to 2050 and 2055, the November high. On the downside, the moving averages are supportive, and to confirm the break out of the ascending triangle formation, futures must first supersede 50 DMA at 1969 before 100 DMA at 1935, respectively. We expect futures to remain supported above the trendline in the near term, but with volumes below the 15-day average, to also struggle above the near-term resistance, remaining broadly range-bound.