NY 2nd Month Sugar Futures
NY sugar futures buckled on Friday as selling pressure prompted a close on the back foot at 20.50. The %K/%D is seen converging on the downside, a sign of a bearish trend coming in the near term. The MACD is negative. The rejection of prices above the 21.00 last week, the bearish engulfing formation and the weak close yesterday suggest lower prices towards the 20.00 level. However, the 10 DMA at 20.48 has to be broken first to confirm the appetite for lower prices. On the upside, the support at this level could set the scene for higher prices back above the 40 DMA towards 21.00. The 21.00 has provided robust resistance in recent sessions, and if futures can gain a footing above this level, we could see the bulls target 21.44. Near-term momentum favours the downside, and we expect this to remain the case in the near term.
Ldn 2nd Month Sugar Futures
Ldn sugar futures sold off on Friday as a lack of appetite for higher prices helped to maintain the medium-term trend on the downside, prompting a close at 569.80. Stochastics converged on the downside, suggesting strong selling momentum in the near term. MACD diff is negative and diverging, supporting the outlook for deteriorating prices. The last two trading days formed a bearish engulfing pattern, a sign of an impending market downturn. The sell-off yesterday and close near the lows suggest further selling pressure below the current support level. A break below the 40 DMA level of 569.06 could set the scene for a test of trend support. On the upside, gains back above 580.70 would help suggest the bullish trend in the near term up to trend resistance. We believe that the market lacks conviction, and prices should continue to fall.
NY 2nd Month Coffee Futures
Prices weakened on Friday as moderate selling pressure triggered a close below the 100 DMA support level; the market closed at 242.40. The stochastics are falling, with %K/%D now oversold, and the MACD is negative and diverging, suggesting growing selling pressure. Dips in the market have been well bid in the last couple of sessions, but in order to confirm the outlook for lower prices, futures need to break completely below the 100 DMA and then 240. Conversely, a break above the 10 DMA at 247.77 could set the scene for a test of 40 DMA. Prices need to break below the 100 DMA level completely to confirm the outlook for more bearish momentum.
Ldn 2nd Month Coffee Futures
Ldn coffee weakened on Friday as selling pressure triggered a close below the robust support level of 4338 at 4279. The MACD diff is negative and diverging, and the stochastics are diverging on the downside in the oversold. The recent month’s losses have been well bid, and in order to confirm the complete change of the longer-term trend on the downside, prices need to break below the 4200 completely. Conversely, to suggest a trend change, the market needs to break above the 10 DMA at 4412 before targeting 4500. We expect prices to weaken in the near term.
NY 2nd Month Cocoa Futures
NY cocoa held their nerve on Friday as prices closed at 6950. The stochastics are rising, with %K/%D entering the overbought territory. The MACD is positive and diverging, pointing to higher prices in the near term. A break above the 7000 level may prompt a break back above resistance at 7100; a subsequent breach of this level could trigger gains towards 7200. On the downside, a break of 6720 may prompt futures to retest the shorter-term DMAs of 10 and 40 DMAs. A subsequent breach of these levels would prompt prices to regain downside momentum in the longer term. Short wicks point to a lack of appetite for higher prices; however, futures need to break below current support to confirm the outlook for lower prices.
Ldn 2nd Month Cocoa Futures
Ldn cocoa futures edged higher on Friday as a moderate upside saw prices close above 5359 at 5435. The %K/%D is positive and diverging on the upside. The MACD diff is positive and diverging, suggesting growing upside pressure. The indicators point to higher prices in the near term, and to confirm the support at 5359, prices need to take out 5500. A break above this level towards 5750 would confirm the strong bullish momentum. Conversely, appetite for prices below the 10 DMA at 5095 could trigger a test of 5000. Two opposite doji candles point to market uncertainty around price movement, and futures need to take out near-term resistance at 5500 to set the scene for further bullish momentum.
