NY 2nd Month Sugar Futures
NY sugar futures held their nerve yesterday as intraday trading saw futures test appetite at 17.20. This level held firm, and futures closed at 17.33. The stochastics are falling, and the MACD diff is negative and diverging, signalling growing selling pressures. To confirm the outlook for lower prices, the market needs to take out support at 17.00 and then support at 16.64. On the upside, a break above the resistance at 10 DMA at 17.74 could set the scene for futures to take out the 18.00 level before targeting 18.42, where the longer-term DMAs are positioned. A thin candle after the three black crows formation signals uncertainty about the outlook for lower prices, and futures need to take out the 17.00 to confirm the outlook for falling prices.
Ldn 2nd Month Sugar Futures
Ldn sugar futures edged lower as prices weakened to test the support of 480, closing above this level at 482.80. The %K/%D is falling towards the oversold. The MACD diff is negative and diverging, suggesting further appetite for lower prices. However, futures need to break below the 480 level first to trigger the momentum. A break below this level towards support at 464 would confirm the strong bearish momentum. Conversely, appetite for prices above the 10 DMA at 492 could trigger a test of resistance of 500. A long-legged candle shows indecision about either direction; the length of the wicks also points to increased volatility during the day. The indicators point to a further fall in prices, but futures need to close below 480 to confirm the momentum.
NY 2nd Month Coffee Futures
NY coffee futures sold off yesterday after futures failed above the 400 level, prompting a close on the back foot at 384. The stochastics are falling out of the overbought territory, and the MACD diff is positive and converging on the downside, outlining growing weakness in the market. Selling pressure has been strong, and yesterday's close on the low suggests lower prices towards support at 380. This support level has been robust, and we expect this level to remain on hold. Alternatively, if prices can gain a footing above the 400 resistance, the bulls could then target 407 in order to regain upside conviction. We anticipate prices to remain on the back foot in the near term.
Ldn 2nd Month Coffee Futures
Ldn coffee plummeted sharply yesterday as protracted selling pressure triggered a breakthrough of all moving averages and a close on the back foot at 5126. The stochastics are falling, and the %K/%D is falling out of the overbought, sending a strong sell signal. The MACD diff is positive and converging, suggesting increasing selling pressures; this could set the scene for lower prices towards the 5000 support level. A break below this would confirm the trend for falling prices down to the 4664 level. On the upside, resistance at 5369 has proven to be strong, and an appetite above that level would strengthen the bullish momentum. This could also trigger gains towards the 5500 level, previous highs. The bearish engulfing pattern suggests an impending market downturn, and we expect prices to continue to fall in the near term.
NY 2nd Month Cocoa Futures
NY cocoa held its nerve yesterday as prices closed at 8743. The stochastics are falling, with %K/%D exiting the overbought territory. The MACD is positive and converging, pointing to lower prices in the near term. The rejection of higher prices may prompt a breakback towards support at longer-term DMAs at 8350; a subsequent breach of this level could trigger losses towards 8000. On the upside, a break of 10 DMA at 8898 and 9000 may prompt futures to retest last session's highs at 9542. A subsequent breach of this level would prompt prices to regain upside momentum in the longer term. Longer wicks point to a lack of appetite for prices in either direction; however, futures need to break below current support to confirm the outlook for lower prices.
Ldn 2nd Month Cocoa Futures
Ldn cocoa futures held their nerve yesterday, causing the market to close at 6371. The stochastics are rising, with %K about to enter the overbought, and the MACD diff is positive and flat, suggesting stalling appetite in the near term. To suggest the outlook for higher prices, futures need to close back above the key resistance of 6518 and then target 7000. The 10 DMA is closing in and supporting prices from the downside. However, a break below 6000 could set the scene for new lows and could point to a change of trend. The narrow candle body with short wicks points to market uncertainty about the outlook for higher prices, and we could see futures change momentum in the near term.
