NY 2nd Month Sugar Futures
NY sugar futures edged lower yesterday as prices struggled above the 40 DMA level, closing at 25.81. The indicators continue to favour the upside, with %K/%D strengthening out of the oversold and MACD diff negative and about to converge on the upside, suggesting growing buying pressures. A break below the 10 DMA at 25.58 would bring into play the recent sessions’ support level at 25.46. Prices have been well supported above the trendline, and in order to indicate an improvement of market sentiment on the upside, futures need to gain a footing above the 40 DMA at 25.91 and then target the recent highs of 27.20 in the near term. The hanging man candle formation suggests that while there was a sell-off during the day, the buyers had an appetite for higher prices. The break above the resistance level would confirm the trend for further gains in the near term.
Ldn 2nd Month Sugar Futures
Ldn sugar futures opened higher day-on-day but struggled to break above the resistance of 720 and closed at 718.80. The stochastics are diverging on the upside, with %K now overbought, but the appetite for higher prices is not strong enough, and %D is yet to catch up. Likewise, the MACD diff just converged on the upside, a strong buy signal. To confirm the outlook for higher prices, futures then need to take out the 720 level completely to the 736 level. Conversely, appetite for prices below 40 and 10 DMAs at 705 could trigger a test of support at 700. A dragonfly doji candle shows rejection of higher prices above 720; however, the indicators continue to favour further gains, and we expect yesterday’s candle to act as a pause in the recent trend. We expect futures to strengthen further in the near term.
NY 2nd Month Coffee Futures
NY coffee futures held their nerve yesterday, causing the market to close at 148.45. The stochastics are rising, with %K/%D diverging strengthening; the MACD diff just converged on the upside, suggesting higher prices in the near term. To confirm the outlook of higher prices, futures need to close above 150; the level futures struggled to break above in the last couple of sessions and then target 40 DMA at 151.93. A break above that level could set the scene for 155.80 and 160, respectively. On the downside, a break below 147.20 could set the scene for 143. The narrow candle body with a longer lower wick points to more appetite on the upside, but the futures need to break out of current resistance to confirm the near-term outlook.
Ldn 2nd Month Coffee Futures
Ldn coffee strengthened yesterday, as futures struggled below the support level of 2230, prompting a close on the front foot at 2245. The stochastics are converging on the upside in the oversold, about to send a strong buy signal. The MACD diff is negative and converging. A bullish candle with a longer lower wick suggests growing buying pressures; this could set the scene for higher prices to break above 2300. This would confirm the trend for rising prices, up to 10 DMA at 2308. On the downside, a breach of support at 2210 would strengthen the bearish momentum. This could also trigger losses towards the 2200. Indicators are showing a change of the trend on the upside, and if futures break above the robust resistance, we expect to gain positive momentum in the near term.
NY 2nd Month Cocoa Futures
NY cocoa edged higher yesterday as intraday trading caused futures to test appetite above the trend level; the market closed above at 3494. Stochastics are rising, and %K/%D converged on the upside in the oversold territory, confirming a change of trend in the near term. The MACD diff is negative and converging, suggesting waning selling pressure. The indicators converging suggests an end to the rangebound trend in the near term. To maintain positive momentum, prices need to close above 3483 and then target 40 DMA at 3540, which is also the last week’s high. On the downside, the rejection of prices above these levels could trigger losses back to 3400. Buying pressure remains weak; however, indicators point to an end of the selling pressure, and the candle with little shadow underlines growing certainty in the market. The reaffirmation of support above 10 DMA could strengthen the outlook of higher prices.
Ldn 2nd Month Cocoa Futures
Ldn cocoa edged higher yesterday as intraday trading caused futures to test appetite for prices above the 10 DMA level at 2952 at 2973. Stochastics are rising, confirming positive momentum. The MACD diff is negative and converging, suggesting growing buying pressure. To maintain positive momentum, prices need to close above 3000 and then target the trendline, which is currently at 3070. On the downside, the rejection of prices above the current resistance levels could trigger losses back to the 10 DMA at 2952 before targeting the 40 DMA at 2922. Buying pressure remains weak, but indicators point to additional highs. The reaffirmation of support above 3000 could strengthen the outlook of higher prices.