NY 2nd Month Sugar Futures
NY sugar gained ground on Friday after support at 25.40 held firm once again. Futures closed at 26.05. The stochastics have regained their upside conviction, with the %K/%D once again diverging on the upside into the overbought while the MACD diff is positive and diverging. This suggests that we could see further gains in the near term; however, over the longer-term horizon, the trend is being exhausted. We expect the resistance at 26.37 – the recent high - to stand firm and create the triple-top formation. If, however, this level is broken above, it could test 27.00 and 27.21, respectively. Alternatively, moving averages support prices on the downside, with the 10 DMA at 25.01 before the 100 DMA at 24.66. We also expect these to hold firm. Prices should drift higher to 26.37 in the near term but struggle above this level.
Ldn 2nd Month Sugar Futures
Ldn sugar futures held their nerve on Friday, settling above the robust support of 700 at 715.30. The indicators are pointing to further upside pressures, with %K/%D diverging into the overbought, while the MACD diff is positive and diverging. This suggests that prices might hold above 700 in the near term and attempt to test the 715 level repeatedly. If the solid resistance is broken above, this could set the scene for 725 and 750. On the downside, futures must first break below the 700 support before targeting the moving averages, in particular, the 10 DMA at 689.9. We expect prices to continue trading rangebound in the near term.
NY 2nd Month Coffee Futures
NY coffee futures edged lower on Friday after prices struggled above the 155.80 level once again, closing at 151.90. The stochastics are confirming the end of the marginal uptrend that we saw in recent weeks: %K/%D is now converging on the downside near the overbought, about to send a strong sell signal, and the MACD diff is positive and converging. This suggests that we could see prices weaken in the near term, breaching the 10 DMA support level at 152.98, down to 150. A breach below this level could pave the way for the recent lows of 148. Alternatively, if futures find strength to break above the 155.80 level, this could set the scene for the 40 DMA level at 157.36. We expect futures to weaken marginally in the near term.
Ldn 2nd Month Coffee Futures
Ldn coffee edged lower on Friday as prices struggled above the trend resistance and moving averages, closing at 2482. The indicators are confirming a move on the downside, with %K/%D seen converging lower, as MACD diff is positive and diminishing. The rejection of prices above the longer-term moving averages has formed a candle with a long wick on the upside, suggesting a lack of appetite for higher prices. However, a lack of conviction to break below the near-term support. If prices were to break below 10 DMA at 2426, this could trigger a test of 2400 and then 2375. On the upside, futures need to take out the 40 and 100 DMAs at 2499 and 2521, respectively, to suggest further gains. Indicators point to growing selling pressures, but the futures need to take out 10 DMA in the near term to confirm this.
NY 2nd Month Cocoa Futures
NY cocoa futures held their nerve on Friday as intraday trading caused the market to close at 3605. The stochastics are falling, and the MACD diff is positive and converging, 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 3600 and then target the 10 DMA level at 3514. The 10 DMA is starting to close in and support prices from the downside. However, a break below that level could set the scene for 3450 and indicate the end of the long-term trend. On the upside, gains back above Thursday’s high of 3677 could pave the way for 3700. Futures struggled above the robust trendline in recent days; however, with a lack of appetite for prices below 3600, we could see prices retest the highs once again in the near term.
Ldn 2nd Month Cocoa Futures
Ldn cocoa futures held their nerve on Friday; however, prices struggled above the trendline resistance and closed on the back foot at 2921. The stochastics are falling, with %K/%D seen converging on the downside out of the overbought, a strong sell signal. The MACD is positive and converging, confirming the strengthening appetite for lower prices. The rejection of higher prices may prompt a break back towards support at 2900 and then 2800; a subsequent breach of this level could trigger losses towards 50 DMA at 2653. On the upside, a break of the trend resistance may prompt futures to test 3000. A narrow candle body points to a lack of appetite for prices above the near-term resistance, with the indicators pointing to growing downside pressures, we expect futures to soften in the near term.
