NY 2nd Month Sugar Futures
NY sugar futures held firm on Friday after finding support above the trend support. The market closed at 26.01. The stochastics are losing ground out of the overbought territory, and the MACD diff is positive and flat day-on-day, suggesting we could see a slowdown of the downside trend. A break below the current support level completely would bring into play the 100 DMA level at 25.12, which could set the scene for 25.00. On the upside, futures need to gain back above 10 and 40 DMA levels at 26.01 and 26.25, respectively, in order to confirm upside momentum. The reaffirmation of appetite above these levels could trigger gains towards the level at 27.00; this could strengthen the trend in the long run on the upside. The inside candle points to the current trend on the upside continuing, and with the indicators pointing to a slowdown of downside pressures, we could see further marginal upside in the near term.
Ldn 2nd Month Sugar Futures
Ldn sugar futures remained above a key support level of 725 on Friday. The level closed marginally higher at 734.10. The %K/%D is falling out of the overbought, and the MACD diff is positive and converging, suggesting growing downside pressure. Still, we expect prices to remain supported above the 40 DMA at 719. To confirm further upside momentum, futures have to take out the 740 level before testing the 747.10 once again. An inside candle signals uncertainty about the outlook for higher levels, and a break above the key resistance would confirm there is more appetite for upside.
NY 2nd Month Coffee Futures
NY coffee futures struggled to break below 100 DMA support on Friday, and intraday trading saw prices close at 160.50. The stochastics are falling out of the overbought, and the MACD diff is positive and converging marginally, suggesting some appetite for lower prices, but futures need to break support of 100 DMA at 159.08 to trigger the momentum. A break below this level towards 155.80 would confirm the stronger downward momentum to 150. Conversely, appetite for prices above the 10 DMA at 161.07 could trigger a test of resistance of 164.05. A gravestone doji candle shows rejection of lower prices but lacks the conviction to break above the near-term resistance levels in the form of moving averages. We expect prices to remain range-bound in the near term.
Ldn 2nd Month Coffee Futures
Ldn coffee futures buckled on Friday as protracted selling pressure triggered a close on the back foot below 10 DMA at 2383. The stochastics are falling, and the MACD diff is positive and converging, confirming growing selling pressure; this could set the scene for lower prices towards 2342. A break below this level would confirm the outlook of lower prices and a three-black crows pattern formation. On the upside, a break above 10 DMA at 2412 resistance level and reaffirmation of support above 2450 could strengthen the trend on the upside in the long run. Futures need to take out the DMAs in order to confirm the outlook of higher prices. The long body and longer shadow point to a diminishing appetite for lower prices, and we could see future struggle below the 2342 in the near term.
NY 2nd Month Cocoa Futures
NY cocoa futures edged higher once again on Friday, marking new historic highs, causing futures to test appetite at 3896 and then close at 3880. The stochastics are improving further into the overbought, and the MACD diff is positive and diverging. In order to confirm the outlook of higher prices, futures need to close back above 3900 and then target 4000. The 10 DMA is supporting futures on the downside, and if prices fail above current levels, this could trigger losses towards 3800 in the near term. A short candle body with little shadow suggests a continued marginal upside in the near term.
Ldn 2nd Month Cocoa Futures
Ldn cocoa futures edged higher yesterday as prices closed at 3358. The indicators continue to favour the upside, with %K/%D diverging further into the overbought, but MACD diff is positive and flat, suggesting that upside momentum is slowing. This is further confirmed by the hanging man formation, pointing to bulls losing some of the control of the market. On the upside, a break below the 3296 level would bring into play the recent support level at 10 DMA at 3231. In order to indicate an improvement of market sentiment on the upside, futures need to gain a footing above 3400 in the near term. We believe that the market may be due to a marginal correction in the near term; however, the longer term on the upside is likely to persist.