NY 2nd Month Sugar Futures
NY sugar futures softened marginally yesterday as markets lacked the strength to push below the 22.00 level, following the previous day's sell-off, closing at 22.23. The stochastics have continued to decline into the oversold, with %K/%D diverging on the downside. Likewise, the MACD diff is negative and diverging on the downside, highlighting recent selling pressures. To suggest an outlook for a trend change, futures need to break above the resistance at 23.00, which could set the scene for futures to take out the 24.00 before moving averages. On the downside, the market needs to take out support at 22.00 and then support at 21.88, which is a June low. The 10 DMA level is now a firm resistance for prices; however, with a longer upper wick on Thursday, we could see the bears’ strength diminish in the near term.
Ldn 2nd Month Sugar Futures
Ldn sugar futures held their nerve yesterday after re-testing the support level of 630. The market struggled to break below it, closing at 630.80. The stochastics are oversold, but the downside is weakening, with %K/%D converging on the upside, as the MACD diff is negative and flat. This suggests that we could see a trend reversal in the near term. In particular, the reaffirmation of support at 630 could set the scene for higher prices back to test the 650 level, confirming an inverse hammer formation. On the downside, futures need to break below the near-term support in order to confirm the bearish trend. Indeed, this support level has been robust in the last couple of sessions; a break below this level could bring the June low of 610 into play. The longer upper wick with a narrow body confirms the support is still intact.
NY 2nd Month Coffee Futures
NY coffee futures held their nerve yesterday as intraday trading saw futures test appetite at 10 DMA. This level held firm, and the future closed at 177.50. The stochastics are falling, with %K/%D converging on the downside out of the overbought, and the MACD diff is positive and about to converge on the downside, signalling growing selling pressures. To confirm the outlook for lower prices, futures need to break below the support at 10 DMA at 176.79, which could set the scene for futures to take out 171.85. On the upside, the market needs to take out the resistance of 180 and then the resistance at 185. The candle found support above the 175 level, and a long upper wick signals an appetite for higher prices. If the futures break below the current support, we could see prices edge lower.
Ldn 2nd Month Coffee Futures
Ldn coffee held the nerve yesterday as intraday trading caused futures to close at 2541. The %K/%D is diverging on the upside into the overbought. The MACD diff is positive but lacks the conviction to point out an outlook. To maintain positive momentum, prices need to close above 2550 and then target 2600. On the downside, the rejection of prices above these levels could trigger losses back to 2518 and then 40 DMA at 2545, a firm support level. Buying pressure has been weak, and the indicators point to a continuation of that momentum. The narrow candle body and short wicks confirm market uncertainty. The break of resistance at 2550 could confirm the outlook for higher prices in the near term.
NY 2nd Month Cocoa Futures
NY cocoa futures jumped higher yesterday, but moderate bullish appetite trading saw prices struggling above 4,200, closing at that level. The stochastics are seen converging on the upside, with the %K turning higher, and the MACD diff is negative and converging, suggesting waning selling pressures. A break of the 4200 level could trigger gains through 4220, with the tertiary level at the trend resistance. On the downside, a break below the 10 DMA could set the scene for bearish momentum towards the 4100. The long candle body with a longer upper wick points to increased appetite on the upside, but resistance at 4200 needs to be broken first to confirm the conviction of the momentum.
Ldn 2nd Month Cocoa Futures
Ldn cocoa strengthened yesterday as protracted buying pressure triggered a close on the front foot at 3516. The stochastics are rising, with %K/%D converging on the upside towards the overbought. The MACD diff is negative and converging. A long bullish candle body with little shadow suggests growing buying pressures; this could set the scene for higher prices to break above the resistance at the 10 DMA level completely. This would confirm the trend for rising prices, up to the 3500, and then the recent highs. On the downside, a breach of support at 3400 would strengthen the bearish momentum. This could also trigger losses towards the 40 DMA at 3378. Indicators point to higher prices, and we expect moderate gains on the upside in the near term.
