NY 2nd Month Sugar Futures
NY sugar futures opened above the previous day’s close on Friday; however, resistance at 21.50 once again held firm, causing futures to settle at 21.08. The upside appetite is waning, and the indicators confirm this, with the %K/%D near the overbought and now converging on the downside. Likewise, the MACD diff is positive and converging, suggesting growing selling pressures. To confirm the change of momentum, futures must break below the 21.00 level before targeting 20.86, which is now edging lower, providing more room for the downside in the near term. Alternatively, the resistance at 21.50 is robust, and a breach of this level could trigger gains to 22.00. A lack of impetus above 21.50 and the indicators point to waning buying pressure, and we could see moderate softness in the near term.
Ldn 2nd Month Sugar Futures
Ldn sugar opened on the front foot on Friday but struggled to break above the resistance at 615, closing at 600.24. The indicators point to waning upside pressures, with the %K/%D overbought and stalling and the MACD diff being positive and flat in recent days. The recent market trading has formed an ascending triangle. A break above the robust resistance at 615 could trigger that formation and suggest higher prices in the near term, to 628.10 and 644.98, respectively. However, while we expect prices to break higher in the near term, today’s trading is set to remain on the back foot, with the resistance at 615 holding firm.
NY 2nd Month Coffee Futures
NY coffee futures weakened on Friday, breaking below the 180 support to close at 177.35. The stochastics are oversold and are seen diverging on the downside once again, and the MACD diff is negative and weakened slightly on Friday. The 180 support has been robust in recent days, and a break below this level could trigger further losses to 171.85 and 170, respectively. This would also confirm the formation of a descending triangle, which could create further impetus on the downside. Alternatively, on the upside, the shorter-term DMAs are now holding firm with 40 and 10 DMA at 181.74 and 182.15, respectively. We expect to see further softness in the near term. Indeed, the recent days’ longer upper wick suggests that the bulls are struggling to get hold of the market during the day, causing continued price decline.
Ldn 2nd Month Coffee Futures
Ldn coffee futures held their nerve on Friday as prices struggled to breach the 2970 level once again. The market closed below at 2939. A gravestone doji formation that materialised in recent days suggests that while there is little incentive for prices to fall, the appetite is lacking to push prices significantly higher. Indeed, the indicators continue to strengthen, with the %K/%D edging closer to the overbought, while the MACD diff is negative and converging. A breach into a positive territory could provide the buy signal to push prices higher. In the meantime, we expect futures to hold above the 2900 level as futures remain elevated.
NY 2nd Month Cocoa Futures
NY cocoa futures strengthened on the upside once again on Friday, closing at 4279. The Friday candle followed the formation of three white soldiers. However, the most recent candle struggled above the 4304 resistance, settling just below. A lack of appetite above this level was also underscored by growing upper wick. Still, the indicators point to further gains in the near term, with %K/%D diverging on the upside as the MACD diff is negative and converging. Still, we expect futures to struggle above the 4308 level in the near term, and the upside might stall as markets gauge the appetite for further gains.
Ldn 2nd Month Cocoa Futures
Ldn cocoa futures strengthened on Friday, breaching the 40 DMA resistance to settle at 3475. The stochastics point further gains in the near term. The %K/%D is diverging on the upside, and the MACD diff just converged on the upside – a strong buy signal. To confirm further gains, futures must break above the trendline at 3470 completely before targeting the 3500 level. Alternatively, a fall back below the 40 DMA level at 3451 could set the scene for lower prices to 10 DMA at 3398. We expect futures to continue the upward trend in the near term.