NY 2nd Month Sugar Futures
NY sugar futures rallied, breaking above the robust resistance of 20.71 to test the August 2021 highs of 20.94 and close at 20.83. The stochastics are diverging on the upside, while the MACD diff is positive and diverging. A break above the multi-year highs could suggest further upside impetus in the near term, but a candle with a longer upper wick suggested that markets rejected prices above that level. On the upside, if 20.94 is broken above, this could trigger gains to 21.00 and 21.50, respectively, confirming the ascending triangle formation. Alternatively, the 10 DMA support at 20.32 is standing firm before the trend support at 20.13. We expect futures to retest the 20.94 level today as upside conviction prevails.
Ldn 2nd Month Sugar Futures
Ldn sugar futures jumped higher, breaking above the robust resistance of 600 to close at 602.10. The candle tested 604.60, the high not seen since October 2016. The stochastics are rising and overbought, and the MACD diff is positive and diverging, highlighting the recent buying pressures. On the upside, finding support above the 600 could trigger gains through 604.60 towards the 619 – August 2016 high. On the downside, a break below the 550 level could trigger losses back towards 10 DMA at 579.59. The 40 and 100 DMAs have been supporting futures prices on the downside, at 565.46 and 545.06, respectively. A complete break above 600 and sustained price performance above this level today could suggest further upside in the near term.
NY 2nd Month Coffee Futures
NY coffee futures failed above the previous day’s highs yesterday as intraday trading caused futures to close at 173. The stochastics have softened, with %K/%D diverging on the downside, and the MACD diff is negative and diverging once again. The rejection of prices at 171.85 and a break below the 100 DMA level at 169.78 would suggest an appetite for lower prices. Alternatively, if prices were to break back above 180, this could trigger a test of 194.15. There is no signal at this momentum suggesting that we might break out of the current support and resistance level, and we expect further sideways trading in between the moving averages in the near term.
Ldn 2nd Month Coffee Futures
Ldn coffee futures weakened yesterday after investors rejected prices above 2216, prompting a close at 2142. The stochastics are falling, with RSIs in neutral territory; the %K/%D is about to converge on the downside, as it trades near overbought, suggesting a short-term negative trend. The MACD diff is positive and converging, indicating improving sentiment on the downside. To confirm another bearish candle, prices need to break below the support level at 2131 before the 10 and 40 DMA levels at 2115. On the upside, to regain upside conviction, futures need to close back above 2000 and then 2216 in the near term. Near-term momentum is on the downside; the close below the shorter-term DMA would confirm this trend.
NY 2nd Month Cocoa Futures
NY cocoa continued to edge higher yesterday, breaking above the key resistance of 2856 and settling at 2870, February 2020 highs. The stochastics are seen flattening out in the overbought, suggesting that the recent upside trend might be slowing. Likewise, the MACD diff is positive and diverging, but the recent gains have been marginal. The volumes have continued to diminish, suggesting slowing momentum on the upside. To confirm this, futures need to find resistance either at 2879 or 2900 before trend reversal could trigger some softness back to 2800 and 10 DMA at 2777, respectively. We expect that the bull run is being exhausted, and we might see a case for trend reversal build in the near term.
Ldn 2nd Month Cocoa Futures
Ldn cocoa futures opened higher yesterday, but resistance at 2150 caused futures to close lower on the day at 2139. The stochastics are rising further into the overbought, but the upside momentum is waning, and the MACD diff is positive and diverging. On the downside, a break of 2100 could trigger losses through trend support at 2090, with the tertiary levels at 50 DMA at 2069. On the upside, a break above 2150 could set the scene for bullish momentum towards 2175. The candle closing lower on the day could be a sign that futures found robust resistance at current levels, and the indicators point to decelerating upside momentum. To confirm this, futures need to edge lower in the near term.
