NY 2nd Month Sugar Futures
NY sugar futures held above 10 DMA on Friday once again but, at the same time, struggled to break above the 40 DMA resistance level. The longer upper wick suggests a rejection of prices above 26.00, closing below at 25.74. The stochastics suggest that upside momentum is set to continue, with %K/%D diverging on the upside into the overbought, while the MACD diff is about to converge on the upside, which would create a strong bullish signal. Volumes have been quite low, suggesting a lack of strong impetus to break out of the current range; however, if futures see support at 10 DMA at 25.31 solidify, this could build the case for upside momentum to test the 26.00 level before 26.50. Alternatively, if the support is broken, it could trigger further losses back to recent lows of 25.00 and 24.00, respectively. We expect to see marginal upside pressures in the near term.
Ldn 2nd Month Sugar Futures
Ldn sugar futures held their nerve on Friday as intraday trading saw futures test appetite above 40 DMA. This level held firm, and the future closed at 722.40. The stochastics are rising further into the overbought, and the MACD diff is diverging on the upside, signalling growing buying pressures. To confirm the outlook for higher prices, futures need to break above the resistance at 725, which could set the scene for futures to take out the 747.10 level. On the downside, the market needs to take out support at 40 DMA at 710.33 and then 10 DMA at 706.77. The moving averages are providing firm support for futures prices, and we expect further gains in the near term.
NY 2nd Month Coffee Futures
NY coffee futures rallied on Friday as protracted buying pressure triggered a close on the front foot at 155.15. The %K/%D is rising and diverging. The MACD diff crossed on the upside, a clear buy signal. On the upside, a break above 155.80 – the last weeks’ high - could trigger gains through 160 towards the 100 DMA resistance of 160.97. On the downside, a break below the key support level of 150 could trigger losses back towards 10 DMA at 149.02 to confirm the outlook of lower prices in the longer term. We believe that prices will strengthen today, but the resistance at 155.80 remains key to confirming the outlook for higher prices in the near term.
Ldn 2nd Month Coffee Futures
Ldn coffee strengthened on Friday as protracted buying pressure triggered a close on the front foot at 2284. The stochastics continue to rise, with %K/%D seen converging out of the oversold. The MACD diff is negative and converging. A longer bullish candle body with a longer upper wick suggests a lack of appetite above the 10 DMA level at 2277. A break above this level would confirm the trend for rising prices up to 2300. On the downside, a breach of support at 2240 would strengthen the bearish momentum. This could also trigger losses towards the 2200. Indicators point to higher prices, and if futures break above the 10 DMA resistance level, we could expect to see prices edge higher in the near term.
NY 2nd Month Cocoa Futures
NY cocoa futures gained ground on Friday as buying pressure triggered a close on the front foot above 3500 at 3525. The stochastics are rising, with the %K/%D about to enter the overbought area, as the MACD diff is positive and diverging on the upside. This suggests we could see higher prices in the near term towards the resistance of 3600, but the market needs to take out immediate resistance of 40 DMA at 3543. On the downside, the candle closed above 3500, and if this level does not hold, we could see prices test 3483 before 10 DMA at 3475. Longer lower wick points to an appetite for higher prices, but futures need to take out the 40 DMA level completely in order to confirm the outlook on the upside.
Ldn 2nd Month Cocoa Futures
Ldn cocoa futures surged on Friday, breaking above trend resistance at 1423 and closing at 1460. The stochastics are rising, with %K/%D just converging on the upside in the overbought territory, and the MACD diff is positive and diverging, sending a buy signal. The reaffirmation of support at 1423 could set the scene for higher prices back to test the 1471 – the August highs. This would confirm the three white soldiers’ formation and the outlook for higher prices. On the downside, futures need to break below the support of 1400 in order to end the recent sessions’ bull trend. Then, the 10, 40 and 100 DMAs are providing robust support levels. The market needs to gain a footing above the 1471 in the immediate term to confirm a further bullish outlook.