NY 2nd Month Sugar Futures
NY sugar opened slightly higher on the day on Friday, but gains during the day did not hold, as futures struggled with higher prices, above 25.50, closing at 25.02. The longer upper wick during the day suggests a lack of momentum for higher prices, but the indicators suggest that more upside momentum is on the horizon: the %K/%D are diverging higher out of the oversold, and the MACD diff is negative and about to converge on the upside, which would indicate a strong buy signal. Volumes at muti-week highs also confirm higher market participation. We expect that futures will retest the recent highs; however, the resistance at 40 DMA at 25.17 is standing firm for now, and a break above it could trigger further upside to 25.80 and 26.00, respectively. Alternatively, another moving average at 10 DMA at 24.67 is now also capping prices from the downside, creating a tight trading range. We expect prices to test the 40 DMA resistance level today.
Ldn 2nd Month Sugar Futures
Ldn sugar, in line with NY sugar futures, opened higher on Friday, but resistance at 40 DMA triggered a close below at 677.90. The stochastics continue to gain ground out of the oversold territory, but the momentum has been slow; the MACD diff is negative and converging. The RSI is falling, and the shooting star formation on Friday could indicate a potential trend reversal in the near term. To confirm this, the support of 10 DMA at 679.90 needs to be broken first before testing the 661.10, a support level that has not been breached since March. On the upside, if there is an appetite for prices above 40 DMA at 685.93, we could see further gains to 700. Futures have been capped by the 711 and 661 levels on both the upside and downside, and the indicators suggest that we are unlikely to break out of this range in the near term.
NY 2nd Month Coffee Futures
NY coffee futures opened above the 190 level on Friday, but protracted selling pressure later on in the day brought futures to a close of 186.65. The indicators are suggesting that upward momentum is slowing, with %K/%D rising marginally near the overbought, and the RSI is now falling. The length of Friday’s candle and increased volumes suggest that current market uncertainty out of the 171-194 range could cause higher volatility during the day’s trading. The support of 40 DMA at 186.53 is now holding firm and could trigger some upside back above 190; consequently, further gains could set the scene for prices above 194.15 and 198.10, respectively. On the downside, a break below the 40 DMA could trigger losses to 10 and 100 DMA at 180. We expect prices to remain in the higher trading ranges today.
Ldn 2nd Month Coffee Futures
Ldn coffee futures held their nerve on Friday as intraday trading saw prices close at 2702. The RSI is now falling, edging out of the overbought, and %K/%D is now converging on the downside, signalling growing downside pressures. Futures need to break back below 2675 first to trigger the momentum on the downside. A break below this level towards 10 DMA at 2590 would confirm the growing bearish momentum. Conversely, appetite for prices back above 2790 could set the scene for 2800. A long-legged doji candle shows indecision about either direction as prices trade near the highs; the length of the wicks also points to increased volatility during the day. The indicators highlight the impetus for a change of momentum on the downside, but futures need to close below 2675 first.
NY 2nd Month Cocoa Futures
NY cocoa futures strengthened once again on Friday, breaking above the resistance of 3150 to close higher at 3175. The stochastics have entered the overbought territory, but the momentum is not yet seen slowing down, and the three white soldiers’ formation confirms this sentiment. To suggest further gains on the upside, futures must breach Friday’s highs at 3178 before attempting to test the 3200 level. Alternatively, losses back to 3100 could suggest growing downside momentum to 10 DMA at 3060. The indicators point to further gains, but with them being overbought, we expect to see a slowdown in upside pressures in the near term.
Ldn 2nd Month Cocoa Futures
Ldn cocoa futures gained ground on Friday as buying pressure triggered a close on the front foot above 2400 at 2426. The stochastics are rising with the %K/%D diverging on the upside in the overbought, as the MACD diff is positive and diverging on the upside, outlining growing buying pressures. This suggests we could see higher prices in the near term towards 2450, but the market needs to take out immediate resistance of 2431. On the downside, the candle found support at 2400, and if the prices break through this level, we could see futures retreat back through 2355 before 2300. Friday’s bullish candle created a three-white soldier formation, and a complete break above 2400 would signal further bullish momentum in the near term.