NY 2nd Month Sugar Futures
NY sugar futures gained ground on Friday as buying pressure triggered a close on the front foot at 25.09. The stochastics continue to rise, but the %K/%D’s upside is seen slowing in the overbought area, as the MACD diff is positive and diverging, with gains moderating. This suggests we could see prices remain elevated above 25.00; however, we believe that the recent upside trend might be getting exhausted. As a result, on the upside, the market needs to take out the immediate resistance of 25.00 completely. A test of the 26.00 resistance level would confirm a stronger appetite for higher prices. On the downside, the moving averages support the prices. At the same time, the 10 DMA is about to break above the 40 DMA level – a golden cross formation – which reaffirms the near-term support at 24.36. If the prices break through these levels, we could see prices retreat back through 24.09 before 24.09. The three-white soldier formation is a bullish signal, but futures need to take out the near-term resistance at 25.00 completely in order to confirm the outlook on the upside.
Ldn 2nd Month Sugar Futures
Ldn sugar futures strengthened on Friday as protracted buying pressure triggered a close on the front foot at 692.70. The RSI is rising, while %K/%D are diverging on the upside, with %K now overbought. The MACD diff is positive and diverging, outlining recent market growth. On the upside, a break above 700 could trigger gains through 711.60 – the April high. On the downside, a break back below the moving average support level of 671.04 could trigger losses back towards 100 DMA at 650. The market rally has been strong, with three white soldiers' formation confirming the strength of bull sentiment. The 10 DMA crossed above the 40 DMA level, which could further add some upside momentum. We could see prices trend even higher today, but support at 670 needs to hold firm for this to be the case.
NY 2nd Month Coffee Futures
NY coffee strengthened on Friday as protracted buying pressure triggered a close on the front foot above the 10 DMA at 161.55. The stochastics continue to rise, with %K/%D seen converging on the upside out of the oversold. The MACD diff is positive and diverging. A long bullish candle body with a long lower wick suggests growing buying pressures; this could set the scene for higher prices to break above the resistance at 164.05. This would confirm the trend for rising prices, up to 170. On the downside, a breach of support at 10 DMA at 158.03 would strengthen the bearish momentum. This could also trigger losses back towards 155.80. Indicators point to higher prices, and with futures breaking above the 10 DMA resistance level, we expect to see prices edge higher today.
Ldn 2nd Month Coffee Futures
Ldn coffee futures held their nerve on Friday, causing the market to close at 2602. The stochastics are rising, with %K/%D diverging on the upside, and the MACD diff just converged on the upside – a strong buy signal. To confirm the outlook of higher prices, futures need to close above 40 DMA at 2613 and then target 2675. On the downside, a break below the 2600 level could set the scene for 2518, the recent low. A bullish candle with a long body and short wicks after a similar bearish candle points to uncertainty about the outlook, and the futures need to break out of current resistance to confirm the near-term outlook on the upside.
NY 2nd Month Cocoa Futures
NY cocoa futures held their nerve on Friday as intraday trading caused the market to close at 3404. The stochastics are rising, and the MACD diff is negative and converging, suggesting higher prices in the near term. The RSI is also rising; to confirm the outlook of higher prices, futures need to break above the 3400 level completely and then target 3424. The 10 DMA is starting to close in and support prices on the downside. However, a break below that level could set the scene for 3300. The market struggled to break above the 3400 level completely in recent days, and we expect this level to be retested today.
Ldn 2nd Month Cocoa Futures
Ldn cocoa futures strengthened on Friday as protracted buying pressure prompted a test of the 2558 level once again to close slightly above at 2562. The stochastics are diverging on the upside, and the MACD diff is negative and converging. To confirm another bullish candle, futures need to close above 2558 completely and then target 2600. On the downside, the break below 2500 could set the scene for lower prices towards the support of 50 DMA at 2449. However, the market struggled below these levels in recent sessions, and the bullish engulfing pattern suggests a strong buy signal. We believe that prices will strengthen in the near term.