NY 2nd Month Sugar Futures
NY sugar futures started the day on the front foot on Friday but struggled to break the previous day’s resistance of 20.70. The market closed at 20.60. The stochastics are diverging on the upside into the overbought territory, and the MACD diff is positive and diverging, suggesting we could see higher prices in the near term. A break below 10 DMA at 20.25 would bring into play the 20.00 level, which could set the scene for 40 DMA at 19.68. On the upside, futures need to gain back above 20.70 in order to confirm upside momentum. The appetite above that level could trigger gains towards 20.94; this could strengthen the trend in the long run on the upside. The hanging man formation points to a potential end of the recent uptrend, and we expect to see the end of the bull run in the near term.
Ldn 2nd Month Sugar Futures
Ldn sugar futures held their nerve on Friday, causing the market to close at 577.60. The stochastics are overbought but are showing signs of slowing, with %K/%D tailing off, and the MACD diff has begun to converge on the downside, suggesting lower prices in the near term. To confirm the outlook of lower prices, futures need to close below 10 DMA at 567.16 and then target 560. On the upside, a break above the 580 level could set the scene for 580.70, the recent high. A bullish candle with a narrow body and longer lower wick points to uncertainty about the outlook for higher prices, and futures need to break below the moving average support to confirm the near-term outlook on the downside.
NY 2nd Month Coffee Futures
NY coffee futures edged higher on Friday but still struggled to close above the 180 level, instead settling at 180.94. The indicators suggest we could see a trend reversal trend building in the near term. The stochastics are converging on the upside out of oversold, the RSI is rising, and the MACD diff is negative and converging. On the upside, a break above the 10 DMA at 180.94 could then test the 190 level. Superseding this level, resistance stands at 194.15, the February high. On the downside, if futures fail into the 40 DMA at 174.27, then we could see futures break back below the 100 DMA level at 170.32. The narrowing DMA resistance and support narrow the trading range; however, the indicators point to a growing upside momentum, and we expect futures to test the 10 DMA level once again in the near term.
Ldn 2nd Month Coffee Futures
Prices weakened on Friday as moderate selling pressure triggered a close at 2140. The stochastics are falling; the %K/%D is diverging on the downside, signalling a continuation of bearish appetite. The MACD diff is negative and diverging. Prices tested the 2140 level once again, however, struggled to break below, reaffirming the robustness of support in recent days. On the upside, a break above the 10 DMA at 2156 could test the 2200 level. Conversely, a break below the 2140 support line could set the scene for a test of 2100. We expect prices to soften today but to remain supported above the 2140 level.
NY 2nd Month Cocoa Futures
NY cocoa futures edged lower on Friday as moderate bearish appetite caused futures to close at 2704. The stochastics continue to decline rapidly, with %K/%D now deeply oversold, and the MACD diff is negative and diverging, highlighting the recent downside trend. Friday’s break out of the trading range suggests growing momentum on the downside; however, the 40 DMA at 2688 is still standing firm and has supported the lows in recent months. Given the indicators being oversold and the longer lower wick on Friday, we expect futures to struggle below this level in the near term. If prices were to break below this level, this could trigger a test of 2671 and then 2600. On the upside, futures need to take out the trend level at 2760 and then resistance at 10 DMA at 2765. Indicators point to further selling pressure today, but the futures need to take out 40 DMA in the near term.
Ldn 2nd Month Cocoa Futures
Ldn cocoa futures buckled on Friday as protracted selling pressure triggered a close on the back foot below 2100 at 2079. The stochastics are falling, about to edge into oversold, and RSI is also falling. The MACD diff is negative and diverging, confirming growing selling pressure; this could set the scene for lower prices towards the 50 DMA at 2045. A break below this level would confirm the outlook of lower prices and a three-black crows pattern formation. On the upside, futures found support at 2059, and if prices hold firm above this level, it could set the scene back above 2100. The long body and a long downside wick point to futures testing the 2059 level but rejecting prices below it. We expect futures to struggle below this level once again today.