NY 2nd Month Sugar Futures
NY sugar futures weakened slightly yesterday as moderate weakness prompted prices to close at 18.97. The %K/%D has converged on the downside, sending a strong sell signal. The MACD diff is negative and diverging once again, suggesting growing selling pressure. The indicators point to lower prices in the near term, and to confirm the rejection of the support, prices need to take out the 40 and 100 DMAs at 18.85. A break below this level towards 18.50 would confirm the strong bearish momentum towards 18.00. Conversely, appetite for prices above 19.21 could trigger a test of resistance of 19.50. A negative candle after a bullish candle signals market uncertainty for higher prices and narrowing support and resistance; DMAs are creating a tight trading range, a break out of which would set the scene for strong momentum. We anticipate prices on the back foot in the near term.
Ldn 2nd Month Sugar Futures
Ldn sugar futures edged lower yesterday, rejecting prices above the 540.20 resistance; the market closed at 533.60. The stochastics point to growing selling pressures, with %K/%D seen converging on the downside, and the MACD diff is negative and diverging. The reaffirmation of support above 10 DMA at 532.56 could trigger gains back towards the 540.20 level. In the long run, resistance at 550 needs to be broken to regain upside conviction. Conversely, a breach of support at 40 DMA may set the scene for lower prices to 519. If futures take out of this level, this would reaffirm the downside trend. We expect prices to weaken in the near term.
NY 2nd Month Coffee Futures
NY coffee futures held their nerve yesterday, closing at 381.75. The stochastics are flattening out, and the MACD diff is negative and flat as the upside momentum slows. This suggests that futures lack the incentive to break higher, while the trend support prevents major corrections. On the upside, futures need to break above the robust resistance levels of 10 and 40 DMA at 383.06 and 390.48, respectively, to trigger the momentum. Prices would then need to take out the 400 level to confirm the longer-term trend on the upside. Conversely, appetite for prices below the trend support at 380 could trigger further losses. A dragonfly doji candle shows rejection of lower prices and could point to an end of the bearish sentiment we have seen in the last couple of days. We expect prices to remain elevated in the near term.
Ldn 2nd Month Coffee Futures
Ldn coffee futures held their nerve yesterday as moderate buying pressure prompted a close above the 100 DMA of 5274 at 5388. The stochastics are flat, suggesting a lack of appetite in either direction. The MACD diff is negative and flat. To confirm another bullish candle, futures need to close above the 10 DMA at 5425 and then target 5500. On the downside, the break below the current support level of 100 DMA at 5274 could create a strong signal, potentially leading to a longer-term trend change. However, the market struggled below the level in recent sessions, and a break below is needed to confirm the bearish outlook in the near term.
NY 2nd Month Cocoa Futures
NY cocoa strengthened once again yesterday, as protracted buying pressure triggered a close on the front foot above 40 DMA of 8831 at 9285. The stochastics are rising, and %K/%D is diverging on the upside towards the overbought. The MACD diff is positive and diverging. A long bullish candle body with a long upper wick following a strong bullish candle suggests that upside pressures might be waning. With the 9540 resistance holding firm yesterday, this level could be difficult to breach. A break above this could set the scene for higher prices towards 10000. On the downside, a break below the 40 DMA support at 8831 would strengthen the bearish momentum. This could also trigger losses back towards 8350. Indicators point to higher prices, and we expect futures to remain elevated today, although the 9542 resistance could be a struggle to breach.
Ldn 2nd Month Cocoa Futures
Ldn cocoa futures held their nerve yesterday as prices struggled above the previous day’s highs, causing the market to close at 6683. The stochastics are rising, with %K/%D diverging on the upside, and the MACD diff is positive and flat, suggesting waning upside pressures. To suggest an outlook for higher prices, futures need to close above the 40 DMA at 6932 and then target 7000. The 100 DMA is closing in and is now supporting prices from the downside. However, a break below that level could set the scene for 10 DMA at 6318. The narrow candle body with a longer lower wick points to a rejection of lower prices, but futures need to break out of current resistance to confirm the near-term outlook.
