NY 2nd Month Sugar Futures
NY sugar rallied once more yesterday, breaching resistance at 21.00 comfortably, and closing at multi-year highs of 21.50. The stochastics continue to diverge on the upside, only just entering the overbought, and the MACD diff is positive and diverging. This suggests that we might see further upside potential before the trend change. The next robust level on the upside is at 21.75, and if this level is breached, we could see further bullish momentum to 21.75 and 22.00, September 2016 highs. Alternatively, if futures struggle above current levels, this could trigger losses back to 20.94 before the 10 DMA level at 20.53. The longer-term upside trend has been strong, and yesterday’s long candle with little shadow suggests further upside momentum in the near term.
Ldn 2nd Month Sugar Futures
Ldn sugar futures rallied once again yesterday as protracted buying pressure triggered a close on the front foot above 600 at 615.60. The RSI is rising, while %K/%D are diverging on the upside in the overbought. The MACD diff is positive and diverging, outlining recent market growth. On the downside, a break back below the support level of 600 could trigger losses back towards 10 DMA at 587.81, which would help confirm the outlook of lower prices in the longer term. On the upside, a complete break above 619 could trigger gains through resistance towards 640, superseding September 2016 highs. The next robust level on the upside is at 637.50, a 2012 high. The market rally has been strong in recent sessions, with three white soldiers' formation confirming the strength of bull sentiment. Yesterday’s breakthrough, along with positive indicators, confirm that we could see prices edge higher in the near term.
NY 2nd Month Coffee Futures
NY coffee futures edged lower yesterday after futures dipped below the 100 DMA to close at 169. The stochastics are falling towards oversold, and the MACD diff is negative and diverging, suggesting lower prices in the near term. To confirm the bearish indicators and rejection of prices above 171.85, futures need to take out support at 100 DMA at 169.70 completely and then target 160. On the upside, futures need to close above 10 DMA at 175.11 and then target 40 DMA at 179 in order to confirm the outlook of higher prices towards 180. Doji candle points to a lack of appetite for lower prices; however, weakness prevailed during the day. Prices need to take out current support to confirm the outlook for lower prices. We expect futures to weaken in the near term back.
Ldn 2nd Month Coffee Futures
Ldn coffee strengthened yesterday as moderate buying pressure triggered a close on the front foot at 2171. The stochastics are rising after %K/%D nearly converged on the downside, and the MACD crossed on the upside yet again, suggesting building upside pressures. A longer bullish candle body with little shadow suggests growing buying pressures; this could set the scene for higher prices to break above 2200. This would confirm the trend for rising prices, up to 2250. On the downside, a breach of support at the moving averages at 2130 would strengthen the bearish momentum. This could also trigger losses below 40 DMA at 2116. Indicators point to higher prices, however, futures need to break above 2200 to confirm the outlook.
NY 2nd Month Cocoa Futures
NY cocoa futures gained ground yesterday as selling pressure prompted a close on the front foot at 2891. The RSI is rising, while %K/%D is diverging on the downside while deeply overbought. The MACD diff is positive and diverging. The support above 2856, and the bullish engulfing formation suggest higher prices towards 2900, a robust psychological resistance. The 10 DMA has provided robust support in recent sessions, and if futures can gain a footing above this level, we could see the bulls target 2900 once again. On the downside, if support at 10 DMA does not hold, this could set the scene for lower prices to 2800. The indicators still favour the upside, and we expect this to remain the case today.
Ldn 2nd Month Cocoa Futures
Ldn cocoa futures opened lower yesterday after piercing the support level of 2100. The market struggled below this level, and futures closed higher day-on-day at 2135. The stochastics are rising once again, with %K/%D just diverging on the upside in the overbought, and the MACD diff is positive and flat. The appetite back above 2155 could set the scene for higher prices back to test 2175, confirming the hammer formation. On the downside, futures need to break below the trend support, currently at 2100, in order to confirm the bearish trend. Indeed, the trend support level has been robust in recent months, and we expect prices to remain supported above this level in the near term.