NY 2nd Month Sugar Futures
NY sugar futures sold off on Friday after investors rejected prices above resistance at moving averages, prompting a close below at 24.29. The stochastics are falling, with RSIs in neutral territory; the %K/%D are diverging on the downside, suggesting a negative trend. The MACD diff converged on the downside, indicating weakness in the near term. To confirm another bearish candle and the three black crows’ formation, prices need to break below the support level at 24.09 before the 100 DMA at 22.86. Conversely, to regain upside conviction, futures need to close back above 10 and 40 DMAs at 25.32 and then 26.00 in the near term. Near-term momentum is on the downside; the close below the shorter-term DMA confirms this trend.
Ldn 2nd Month Sugar Futures
Ldn sugar futures weakened on Friday and closed below the support of moving averages at 664.50. The stochastics continue to fall as they edge out of the overbought. The MACD diff is negative and diverging, pointing to growing selling pressure. A break below 661.10, the support which has not been broken since March, would confirm the outlook for lower prices and the three black crows formation, a clear bearish sentiment. This may pave the way for lower prices to 650, with the tertiary level at 100 DMA at 631.29. Conversely, the reaffirmation of support above the robust support level would suggest higher prices and a close back above the moving averages at 686, setting the scene for higher prices towards 700. The indicators point to a further decrease in prices in the near term; however, we watch out for the 661.10 support.
NY 2nd Month Coffee Futures
NY coffee futures buckled on Friday as protracted selling pressure triggered a close on the back foot below 170 at 164.85, the low not seen since January. The stochastics are falling, and RSI is also falling further into the oversold. The MACD diff is negative and diverging, confirming growing selling pressure; this could set the scene for lower prices towards the 160 level. A break below this level would confirm the outlook of lower prices and the recent downside pressures. On the upside, a break back above the 171.85 resistance level and reaffirmation of support above 170 could strengthen the trend on the upside once again. The long body and little shadow point to an increased appetite for lower prices, and indicators confirm the outlook for more downside momentum in the near term.
Ldn 2nd Month Coffee Futures
Ldn coffee futures weakened on Friday as a lack of appetite for higher prices helped the 10 DMA to hold firm. However, the support at 2675 is still intact, and the market closed at 2676. Stochastics continue to fall, with %K/%D diverging on the downside out of the overbought, suggesting increased selling momentum in the near term. MACD diff converged on the downside, supporting the outlook for deteriorating prices. The last two days formed a bearish engulfing pattern, a sign of an impending market downturn. The weakness on Friday 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 2675 could set the scene for a test of trend support at 2610. On the upside, support around this level has held well in the past, and we expect futures to struggle below this level. We believe that the market lacks conviction on the upside, and prices should continue to fall, testing the 2675 today.
NY 2nd Month Cocoa Futures
NY cocoa futures opened lower but managed to close higher day-on-day at 3203. The stochastics are falling, suggesting a change of momentum in the near term. The MACD diff is positive and converging, confirming the outlook. On the upside, futures need to break above the new resistance levels of 10 DMA at 3205 and 3250 to trigger the momentum. Prices would then need to take out the 3300 level to confirm the longer-term outlook. Conversely, appetite for prices below 3178 could trigger a test of support of 3100. Candles have been trading range bound in the last couple of sessions, and a cross below 10 DMA could suggest growing downside pressures, but futures have to break below the 3178 level first.
Ldn 2nd Month Cocoa Futures
Ldn cocoa futures held their nerve on Friday as intraday trading saw futures test appetite at 2473 once again. This level held firm, and the future closed at 2481. The stochastics are falling, with %K/%D seen converging on the downside in the oversold, and the MACD diff is positive and converging, signalling waning buying pressures. To confirm the outlook for lower prices, futures need to break below the support at 2473, which could set the scene for futures to take out support at 2400. On the upside, the market needs to take out resistance of 2500 and then resistance at 2517. The candle found support above 2473 in recent trading sessions, and a longer upper wick signals a lack of appetite for lower prices. We expect futures to remain range-bound today, but the downside momentum is growing, which could lead to a break of a robust support level in the near term.