NY 2nd Month Sugar Futures
NY sugar futures edged lower yesterday as prices failed above the 10 DMA once again and then closed below at 25.49. The indicators continue to favour the downside; the stochastics are falling, with %K/%D diverging on the downside and edging close to the oversold area, and the MACD diff is negative and diverging on the downside, confirming further selling pressures. A break below the 25.50 level completely would bring into play the support at 40 DMA at 24.42. On the upside, prices need to find support above 10 DMA at 25.71 before targeting 26.00 in the near term. Indicators point to further bearish momentum, and we expect to see further softness until the 40 DMA support level.
Ldn 2nd Month Sugar Futures
Ldn sugar futures held their nerve yesterday as intraday trading caused the market to close at 700.70. The stochastics are falling, and the MACD diff is negative and diverging, suggesting lower prices in the near term. The RSI is also falling; to confirm the outlook of lower prices, futures need to close back below 700 and then target 40 DMA at 667.30. The 40 DMA is starting to close in and supporting prices on the downside. However, a break above 10 DMA at 701.65 could set the scene for 711.60. Two narrow-bodied candles with longer wicks in the last couple of sessions point to market uncertainty, and the futures need to break out of current resistance/support to confirm the longer-term outlook.
NY 2nd Month Coffee Futures
NY coffee futures weakened marginally yesterday after piercing the support levels of 10 and 40 DMA. The market closed below at 185.20. The stochastics are falling, with %K/%D converging on the downside closer to the oversold. Likewise, the MACD diff just converged on the downside, a strong sell signal. To confirm further downside momentum, futures need to break below the support of moving averages completely, down to 180. A break below this level suggests growing conviction on the downside in the longer term. On the upside, reaffirmation of support at 185 could set the scene for higher prices back to breach the 190 up to 194.15. The indicators confirm continued selling pressures, and with the stochastics converging on the downside, we expect the momentum to accelerate slightly in the near term.
Ldn 2nd Month Coffee Futures
Ldn coffee futures opened higher yesterday, but the upside momentum did not last, and futures sold off yesterday as a lack of appetite for higher prices helped to break the 2600 support; the market closed at 2557. Stochastics converged on the downside while in the overbought, suggesting selling momentum in the near term. MACD diff is positive and converging, supporting the outlook for deteriorating prices. The last two days formed a bearish engulfing pattern, a sign of an impending market downturn. The sell-off yesterday and close near the lows suggest further selling pressure below the current support level, and the above-mentioned indicators support lower prices. A break below the 10 DMA level of 2520 could set the scene for a test of support at 2489. On the upside, support around 2600 would help reaffirm the bullish trend in the near term up to trend resistance. We believe that the market lacks conviction, and prices should continue to fall.
NY 2nd Month Cocoa Futures
Prices weakened yesterday as moderate selling pressure triggered a close above the 10 DMA support level; the market closed at 3029. The stochastics are falling, signalling a continuation of the bearish trend. The MACD is positive and converging, but the doji candle formation supports market indecisiveness below 10 DMA. In order to confirm the change in trend, prices need to break below the current support of 10 DMA at 3015 and then 3000. Conversely, a break above 3050 could set the scene for a test of 3085 – a recent high. We expect prices to remain supported above the 10 DMA support level in the near term.
Ldn 2nd Month Cocoa Futures
Ldn cocoa futures edged lower yesterday as marginal selling pressure triggered a close at 2322. The stochastics are falling, with the %K/%D about to converge on the downside and leave the overbought territory, a robust sell signal, and the MACD diff is positive. A break of the 2300 level could trigger losses through 2286, with the tertiary level at 2250. On the upside, a break back above 2350 could set the scene for bullish momentum. After the last session’s market indecisiveness – the spinning top formation – the narrow candle body points to a lack of appetite for prices below the near-term support in the near term.