NY 2nd Month Sugar Futures
NY sugar futures edged lower yesterday after prices broke below the 21.50 level, prompting a close at 21.13. The stochastics are falling, with %K/%D near the oversold; however, the downside momentum is stalling, and the MACD diff is negative and flat. This suggests that downside momentum is stalling, and we could see a reverse trend in the near term. To confirm this, futures need to take out resistance at 21.50 and then target 10 DMA at 21.75. On the downside, futures need to close below 21.00 and then test 20.50 in order to suggest further correction. We expect futures to edge higher in the near term.
Ldn 2nd Month Sugar Futures
Ldn sugar futures edged lower yesterday as prices failed above the previous day's lows, closing below the 615 level at 610.90. The indicators are favouring the downside; the stochastics are falling, with %K/%D diverging on the downside into the oversold area, and the MACD diff is positive and converging on the downside, suggesting further selling pressures. A break below the 40 DMA at 610.40 would bring into play the support at 600. On the upside, prices need to break back above the 615 level and the previous day's high, which is in line with the DMA at 621.10. Indicators point to further bearish momentum; however, prices have struggled to break out of the DMA support/resistance in recent days, and a break out of these levels would set the scene for a trend change.
NY 2nd Month Coffee Futures
NY coffee strengthened yesterday as protracted buying pressure tested the high at 212.20 once again to close at 211.85. The stochastics are rising, with %K/%D in the overbought; however, the upside momentum is seen stalling as %K/%D is tailing off on the downside. The MACD diff is positive and converging. A strong bullish candle body with little shadow suggests growing upside pressures; this could set the scene for higher prices to break above the 212.20 resistance. This would confirm the trend for rising prices, up to 220. On the downside, a breach of support at 210 would strengthen the bearish momentum. This could also trigger losses towards the 10 DMA at 201.98. Indicators point to a potential trend reversal in the near term; however, with futures opening above 212 today, we could see some moderate strength before further softness.
Ldn 2nd Month Coffee Futures
Ldn coffee futures softened yesterday after prices failed above the 3700 level once again, prompting a close on the back foot at 3673. The stochastics have now converged on the downside in the overbought, as the MACD diff is also converging on the downside, suggesting further softness in the near term. Selling pressure has been quite weak; yesterday's short candle body suggests uncertainty surrounding lower prices. To confirm this trend, the 10 DMA at 3596 needs to be breached first. A break below this level could set the scene for 3500. Alternatively, if prices can gain a footing above the 3770 level, the bulls could then target new highs at 3800 in order to regain upside conviction. We anticipate prices will remain on the back foot in the near term.
NY 2nd Month Cocoa Futures
NY cocoa strengthened yesterday as moderate buying pressure triggered a close on the front foot at 9594. The stochastics remain overbought, with %K/%D struggling to gain conviction on the downside. The MACD diff, however, just converged on the downside, signalling a potential change of trend in the near term. Indicators struggle to point out an outlook; however, yesterday's candle with little shadow and a firm support at 10 DMA suggests that prices should remain elevated in the near term. Further gains could set the scene for higher prices to break above the resistance at 9806. This would confirm the trend for rising prices, up to 10000, a new high. On the downside, a breach of support at 10 DMA at 9334 would strengthen the bearish momentum. This could also trigger losses towards 9000. We expect futures to remain elevated in the near term.
Ldn 2nd Month Cocoa Futures
Ldn cocoa futures held their nerve yesterday as intraday trading saw prices test the 10 DMA level and close at 7896. The %K/%D is diverging on the downside out of the overbought. The MACD diff is positive and about to converge on the downside, suggesting growing selling pressure. The indicators point to a trend change, and to confirm the outlook for lower prices, futures need to take out the 10 DMA at 7658. A break below this level towards 7500 and 7000 would confirm the strong bearish momentum. Conversely, appetite for prices above 8000 could trigger a test of new highs. A positive candle with a longer lower wick points to a lack of appetite for lower prices. Therefore, to confirm the indicators' momentum on the downside, the 10 DMA level has to be broken first.
