NY 2nd Month Sugar Futures
NY sugar futures held their nerve yesterday as intraday trading caused the market to close above the robust trendline at 25.86. The stochastics are falling with %K edging towards the oversold, and the MACD diff is negative and diverging, suggesting lower prices in the near term. To confirm the outlook for lower prices, futures need to close back below the trendline at 25.80 and then target 100 DMA at 25.31. On the upside, the rejection of prices at current levels could trigger gains back above the shorter-term moving averages at 25.90 and 26.07, respectively. A break above these levels and a test of 26.50 would confirm the trend on the upside. Two narrow-bodied candles in the last couple of sessions point to market uncertainty, and the futures need to break out of current support to confirm the longer-term outlook.
Ldn 2nd Month Sugar Futures
Ldn sugar futures gapped lower yesterday, but support at 710 caused the market to close at 716.50. The stochastics are falling, with %K/%D now falling in the oversold, and the MACD diff is negative and diverging, suggesting lower prices in the near term. To confirm this momentum, a break below support at 710 could set the scene for the 100 DMA at 701.89. On the upside, to suggest the outlook of higher prices, futures need to close back above the 40 DMA at 723.59 and then target 10 DMA. The narrow candle body with a short upper wick points to a lack of appetite below the current support. We expect futures to remain below the 40 DMA level in the meantime but to struggle to break much lower.
NY 2nd Month Coffee Futures
NY coffee futures weakened yesterday after investors rejected prices above 176, prompting a close below at 171.20. The stochastics are falling, with %K/%D converging on the downside in the overbought, suggesting a growing negative trend. The MACD diff is positive and converging, indicating improving sentiment on the downside. To confirm this, prices need to break below the support level at 10 DMA at 171.82 before the 170 level. Tertiary support stands at 164.05; a break below would confirm the outlook on the downside. On the upside, to regain upside conviction, futures need to close back above 172 and then 175 in the near term. Near-term momentum is on the downside; the indicators confirm this trend.
Ldn 2nd Month Coffee Futures
Ldn coffee gained ground yesterday as buying pressure triggered a close on the front foot at 2549. The stochastics are rising towards the overbought; however, the momentum is slowing, and stochastics are seen flattening out. The MACD diff is positive and diverging, highlighting the recent upside trend. This suggests we could see higher prices towards the 2610 before a potential trend reversal. To suggest further gains, the market needs to take out immediate resistance at 2600. On the downside, if the support around 2520 is taken out, we could see prices retreat back through to 100 and 10 DMAs at 2455 before 2400. Longer upper wick points to a waning appetite for higher prices, and we expect upside momentum to stall in the near term.
NY 2nd Month Cocoa Futures
NY cocoa futures edged marginally higher yesterday, but the bullish momentum was not strong enough to break above 4100 and futures closed at 4043. The MACD diff is positive and converging as stochastics fall out of the overbought. The rejection of prices above 4050 has formed a candle with a narrow body but a long wick on the upside, suggesting markets testing and rejecting prices above the near-term resistance. If prices were to break above this level, this could trigger a test of 4100 and 4127, the recent highs. To confirm the shooting star formation, futures need to take out 4000 and then robust support at 10 DMA at 3978. A break below this level would confirm the outlook for lower prices.
Ldn 2nd Month Cocoa Futures
Ldn cocoa futures edged higher yesterday as intraday trading saw prices supported above the 10 DMA. The market closed at 3415. The %K/%D just left the overbought; however, it is once again seen converging on the upside. The MACD diff is also struggling to break into the negative territory, suggesting that there is a lack of conviction for lower prices. The indicators point to a continued trend on the upside, and to confirm the confirmation of support, prices need to take out 3500. A break above this level towards 2570 would confirm further bullish momentum. Conversely, appetite for prices below the 10 DMA at 3415 could trigger a test of 3370. Two opposite doji candles point to market uncertainty around price movement, and futures need to take out near-term resistance to continue on the upward trend.