NY 2nd Month Sugar Futures
NY sugar futures weakened on Friday as moderate selling pressure triggered a close below the 10 DMA support level; the market closed at 19.27. The stochastics are falling, signalling a continuation of a bearish trend. The MACD is positive and about to converge on the downside, and the long candle body with a longer upper wick confirms a growing appetite for lower prices. Dips in the market have been relatively well bid in the last couple of sessions, but in order to confirm the longer-term continuation of the trend, prices need to break below the robust support levels at 100 and 40 DMA at 19.16 and 18.97, respectively. Conversely, a break back above the 10 DMA resistance line at 19.62 could set the scene for a test of 19.80. We expect prices to remain above the long-term DMA support levels in the near term.
Ldn 2nd Month Sugar Futures
Ldn sugar opened lower on Friday, but support at the 40 DMA held firm, causing futures to close at 523.40. The stochastics are falling lower out of the overbought, and the MACD diff is positive and converging on the downside, suggesting continued momentum on the downside in the near term. To confirm this, the support at 40 DMA at 520.647 needs to be broken first before testing the 512.60 level. On the upside, resistance at 100 DMA at 533.79 and then 550 should be breached to set the scene for higher prices. A longer upper wick suggests that most of the trading took place in the lower ranges during the day as futures continued to test the near-term support. We expect futures to continue testing this level in the near term.
NY 2nd Month Coffee Futures
NY coffee futures sold off on Friday after prices failed above the 240 level, prompting a close on the back foot at 236. The stochastics are falling back towards the oversold territory, and the MACD diff is also diverging on the downside, outlining the weakness in the market. Selling pressure has been strong, and Friday's close on the low could suggest lower prices towards 233.35. This support level has been robust, and we expect this level to remain to hold. Alternatively, if prices can gain a footing above the 10 DMA at 245.92, the bulls could then target 250 in order to regain upside conviction. We anticipate prices will remain on the back foot in the near term.
Ldn 2nd Month Coffee Futures
Ldn coffee futures weakened marginally on Friday but struggled to break completely below the 10 DMA level, causing the futures to close slightly lower 4770. The stochastics are now falling, and the MACD diff is positive and converging. In order to confirm the change in the longer-term trend that we have seen in the last couple of months, prices need to completely break below the support of 4664 and then target the 40 DMA at 4482. Conversely, a break above the 5000 resistance level could set the scene for higher prices. We expect prices to weaken in the near term but struggle to breach the 4664 level.
NY 2nd Month Cocoa Futures
NY cocoa futures held their nerve on Friday as intraday trading saw futures test appetite at 40 DMA once again, closing below at 7081. The stochastics are entering the oversold territory, and the MACD diff is negative and diverging. On the downside, futures need to break below the support at 100 DMA at 6933, which could set the scene for futures to take out 6720. On the upside, the market needs to take out resistance of 40 DMA at 7246 to suggest further gains.
Ldn 2nd Month Cocoa Futures
Ldn cocoa futures held their nerve on Friday as intraday trading saw prices close above the 10 DMA at 5257. The %K/%D is rising out of the oversold, which could be a strong buy signal. The MACD diff is positive and diverging, suggesting some appetite for higher prices, but futures need to break above 5359, a firm resistance, to trigger the momentum. A break above this level towards 40 and 100 DMAs would confirm the growing bullish momentum. Conversely, appetite for prices below the 5000 level could trigger strong losses. A gravestone doji candle shows rejection of higher prices as futures struggle above that level; if the 5359 resistance is broken above, we expect prices to strengthen in the near term.
