NY 2nd Month Sugar Futures
NY sugar futures weakened marginally yesterday after testing the support level of 10 DMA. The market closed above at 25.73. The stochastics are falling, with %K/%D just converging on the downside, close to the overbought. Likewise, the MACD diff is negative and diverging, pointing to a growing sell signal across the indicators. To confirm this, futures need to break below the support of 10 DMA at 25.71, down to 25.50. Indeed, the 10 DMA support level has been robust in the last couple of sessions; a break below this level suggests growing conviction on the downside. On the upside, reaffirmation of support at 26.00 could set the scene for higher prices back to breach the 26.20 level up to 27.00, confirming an inverse hammer formation. The indicators confirm growing selling pressures and a break of 10 DMA support would suggest growing downside conviction in the near term.
Ldn 2nd Month Sugar Futures
Ldn sugar futures edged lower yesterday after they tested the highs of 715 once again to close at 704.20. The stochastics are seen tailing off on the downside near the overbought territory, 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 710, futures need to take out 10 DMA at 697.25 and then target 675. This would cause the futures to break out of the ascending triangle formation, confirming the outlook for negative momentum. On the upside, futures need to close above 711.60 and 718.20, respectively, in order to confirm the outlook of higher prices towards 725. Longer upside wick and a bearish candle point to an appetite for lower prices. Prices need to take out the current support of 10 DMA to confirm the outlook for lower prices.
NY 2nd Month Coffee Futures
NY coffee futures opened above the moving averages, but as prices struggled above the 190 level, futures settled lower on the day at 186.80. The stochastics are rising, with %K/%D diverging on the upside out of the oversold. The MACD is negative and converging, pointing to an appetite for higher prices in the near term. The rejection of higher prices may prompt a break back towards support levels at shorter-term moving averages at 185; a subsequent breach of this level could trigger losses towards 180. On the upside, a break of 190 may prompt futures to retest previous sessions’ highs at 194.15. A subsequent breach of this level would prompt prices to regain upside momentum in the near term. Long upper wick points to an appetite out of the current trading range; however, futures needs to break above 190 to confirm the outlook.
Ldn 2nd Month Coffee Futures
Ldn coffee futures opened higher day-on-day yesterday, closing at 2511. The stochastics are rising, with %K/%D edging to overbought, which could suggest a change of momentum in the near term. The MACD diff is negative and converging and about to break into positive territory. On the upside, futures need to break above yesterday’s resistance level at 2534 to trigger the momentum to highs of 2550 and 2600. Conversely, appetite for prices below 2500 could trigger a test of support of 10 DMA at 2450. A dragonfly doji candle shows rejection of higher prices and could point to an end of bullish sentiment. The indicators, however, suggest further upside pressures in the near term, and we expect futures to remain on the front foot.
NY 2nd Month Cocoa Futures
NY cocoa futures edged higher yesterday, breaking above resistance at 3000 once again and closing at 3006. The stochastics are edging towards the overbought territory, and the MACD diff is positive and diverging, outlining recent bullish sessions. On the upside, futures need to break completely above the 3000 level in order to confirm upside momentum. The reaffirmation of support here could trigger gains towards the level at 3049; this could strengthen the trend in the long run on the upside. A break back below the current support would bring into play the 10 DMA level at 2966, which could set the scene for support at 2930. We see prices edge higher in the near term; however, futures need to close above 3000 completely to confirm the outlook for higher prices.
Ldn 2nd Month Cocoa Futures
Ldn cocoa futures opened lower but managed to regain most of the losses, settling higher day-on-day at 2266. The stochastics are rising, with %K edging close to the overbought, which could suggest further upside pressures in the near term. The MACD diff is positive and diverging, but the momentum is slowing. On the upside, futures need to break above the robust resistance levels of 2286 and 2300 to trigger the momentum. Conversely, appetite for prices below 2200 could trigger a test of support of 50 DMA at 2173. A long candle body with little shadow shows rejection of lower prices and could point to the continued bullish sentiment we have seen in the last couple of days. The indicators highlight a similar trend, but subdued volumes point to market uncertainty about higher prices.
