NY 2nd Month Sugar Futures
NY sugar futures jumped higher yesterday as prices closed at 20.34. The indicators favour the upside, with %K/%D diverging on the upside, and MACD diff is negative and converging, suggesting growing buying pressures. A complete break above 20.48 would bring into play the resistance level at 20.50. On the downside, futures need to break below 10 DMA at 19.95 and then target the recent lows of 19.64 in the near term. The strong candle body suggests a growing appetite for prices above the 10 DMA, but a rejection of recent highs at 20.48 could help form the double top formation. We expect prices to struggle above this level.
Ldn 2nd Month Sugar Futures
Ldn sugar strengthened yesterday as moderate buying pressure triggered a close on the front foot at 558.70. The stochastics are rising, with %K/%D seen diverging on the upside out of the oversold. The MACD diff is negative and converging. A long bullish candle body with a long upper wick suggests growing buying pressures; this could set the scene for higher prices to break above the resistance at 560, but prices struggled above that level. This would confirm the trend for rising prices, up to 575.40. On the downside, a breach of support at 10 DMA at 553.09 would strengthen the bearish momentum. This could also trigger losses towards the support at 40 DMA at 544.29. Indicators point to higher prices, but with prices failing above the trend resistance, futures are capped on the upside.
NY 2nd Month Coffee Futures
NY coffee futures softened yesterday after prices failed above the 195 level, prompting a close on the back foot at 189.70. The stochastics are oversold, with %K/%D seen converging on the downside, and the MACD diff is also converging on the downside, outlining the upcoming weakness in the market. The dips have been poorly bid in recent days, and to confirm the full downward candle, the futures need to break below the 10 DMA level at 183.98 before targeting 180 and 174.35, respectively. Alternatively, if prices can gain a footing back above yesterday’s highs at 195, the bulls could then target 200 in order to regain upside conviction. We anticipate prices to remain on the back foot in the near term.
Ldn 2nd Month Coffee Futures
Ldn coffee futures lost ground yesterday after prices tested the 2200 resistance level, prompting a close at 2161. The stochastics are falling, with %K/%D in the overbought territory, and the MACD diff is positive and converging as futures failed to confirm the outlook for higher prices yesterday. For that to materialise, futures need to close above 2200 resistance and then target 76.4% fib level at 2216 in the medium term. On the downside, the long-bodied candle suggests a growing appetite for lower prices in the near term. Prices need to close below 2131 before targeting 10 DMA at 2110. A bearish inside trading candle suggests uncertainty surrounding the outlook for higher prices, and until the futures break below the near-term support of 10 DMA, we do not expect prices to edge much lower.
NY 2nd Month Cocoa Futures
NY cocoa futures held their nerve yesterday as trading saw prices close at 2618. The stochastics are seen tailing off on the upside near oversold, and the MACD diff is negative and diverging, confirming further softening in the downside momentum before a possible trend shift. On the upside, a break above 10 DMA at 2630 could set the scene for bullish momentum towards 2671. Alternatively, a break of the 40 DMA level at 2607 could trigger losses through 2607. The spinning top formation following similar candles in recent days highlights uncertainty about prices out of the current range between the moving averages. We expect this momentum to continue in the near term.
Ldn 2nd Month Cocoa Futures
Ldn cocoa futures continued to edge lower yesterday as prices failed above the previous day’s highs and then closed below at 2119. The indicators are starting to favour the downside; the stochastics are falling, with %K/%D converging on the downside and edging out of overbought, and the MACD diff is positive and converging on the downside, confirming further selling pressures. A break below the 2100 level would bring into play the support at 2060. On the upside, prices need to find support above current levels before retargeting 2150 in the near term. Indicators point to further bearish momentum, and a cross of 2100 would confirm growing downside momentum. We expect prices to weaken marginally in the near term.