NY 2nd Month Sugar Futures
Prices weakened yesterday as moderate selling pressure triggered a close above the trendline at 25.81. The stochastics are falling, signalling a continuation of the bearish trend. The MACD diff is negative and diverging, further reaffirming appetite for lower levels. Dips in the market have not been well bid in the last couple of sessions, but in order to confirm the change in trend, prices need to break below the current support of 25.70 and then 100 DMA at 25.25. Conversely, a break back above the 10 DMA resistance line at 26.15 could set the scene for a test of 26.50. We expect prices to remain supported above the trendline support level in the near term.
Ldn 2nd Month Sugar Futures
Ldn sugar futures edged lower yesterday after futures tested 730 to close at 745.70. The stochastics are falling, approaching the oversold territory, and the MACD diff is negative and diverging, suggesting lower prices in the near term. To confirm the bearish indicators and rejection of prices above the 10 DMA, futures need to take out 40 DMA at 724 and then target 700. This would cause the futures to end the longer-term bull trend, confirming the outlook for negative momentum. On the upside, futures need to close above the 10 DMA at 741.11 and 750, respectively, in order to confirm the outlook of higher prices. Short wicks and a bearish candle point to a growing appetite for lower prices. Prices need to take out the current support of 40 DMA to confirm the outlook for lower prices.
NY 2nd Month Coffee Futures
NY coffee futures held their nerve yesterday as intraday trading saw futures test appetite at 170. This level held firm, and futures closed at 171.40. The stochastics are falling, with %K about to break below %D in the overbought, a strong sell signal. The MACD diff is positive and converging, signalling growing selling pressures. To confirm the outlook for lower prices, futures need to break below the support at 10 DMA at 170.76, which could set the scene for futures to take out the 164.05 level. On the upside, the market needs to take out resistance of 173 and then 180. The candle found support above 170, and a long upper wick signals a lack of appetite for lower prices. If the futures break below the current support, we could see prices edge lower.
Ldn 2nd Month Coffee Futures
Ldn coffee futures held their nerve yesterday as intraday trading caused the market to close at 2474. The stochastics are rising into the overbought, and the MACD diff is positive and diverging, suggesting higher prices in the near term. To confirm the outlook of higher prices, futures need to close back above 2518 and then target 2600. The 10 DMA is starting to close in and supporting prices on the downside. However, a break below that level could set the scene for 40 DMA at 2375. A narrow-bodied candle with a long upside wick points to market uncertainty about higher prices, and the futures need to break out of current resistance/support to confirm the longer-term outlook.
NY 2nd Month Cocoa Futures
NY cocoa futures buckled yesterday as protracted selling pressure triggered a close on the back foot at 3984. The stochastics have converged on the downside, and %K/%D is giving a sell signal. The MACD diff is positive and converging, confirming growing selling pressure; this could set the scene for lower prices below 3900, but futures need to break below 10 DMA at 3946. A break below this level would confirm the outlook for lower prices down to 3800. On the upside, a break back above the 4000 resistance level and appetite for higher prices could set the scene for 4100. Two-line strike formation points to a pause in the uptrend but does not signal to a complete trend reversal. We are likely to see the longer-term trend on the upside continue.
Ldn 2nd Month Cocoa Futures
Ldn cocoa slumped yesterday as protracted selling pressure triggered a close on the back foot at 3427. The stochastics converged on the downside and are now falling out of the overbought, and the MACD diff is positive and converging. The indicators suggest the futures are going to reverse in the near term; however, to confirm the complete change of trend, futures must break below the 10 DMA level at 3389. This could set the scene for lower prices to 3300. A break below these levels could confirm that the momentum on the downside is growing. Alternatively, a break back above 3500 could test the recent resistance at 3560. The two-line strike formation points to a continuation of an uptrend, but the indicators suggest another decline today. We expect the DMA support levels to hold firm today.