NY 2nd Month Sugar Futures
NY sugar futures strengthened yesterday as continued buying pressure triggered a close on the front foot just below the key resistance of 16.64 at 16.60. The %K/%D diverging towards the overbought as the MACD diff is positive and diverging, confirming growing buying pressures. On the upside, finding support above the 16.64 mark could trigger gains through the 40 DMA level at 16.71 towards 100 DMA at 16.94, all of which are creating a tight resistance band. On the downside, a break back below the 10 DMA at the 16.24 level could trigger losses back towards 16.00. That level has been supporting futures prices, and a break below it would signal a strong selling pressure. While the recent bullish narrative is encouraging, the band of resistance levels is significantly capping the upside potential, and a strong technical trigger is needed to break above these levels in the near term. We expect futures to struggle to post new highs and start to moderate in the near term.
Ldn 2nd Month Sugar Futures
Ldn sugar futures strengthened yesterday, with prices jumping higher above the key 460 level to close at 462.50. The RSI is rising, while %K/%D is diverging towards the overbought. Likewise, the MACD diff just converged on the upside - a strong buy signal. On the upside, finding support above 460 could trigger gains through the longer-term moving averages of 40- and 100-day at 465.54 and 468.73, respectively. On the downside, a break back below the 10 DMA at the 452.70 level could trigger losses back towards 440, a recent low. That level has been supporting futures prices, and a break below it would signal a strong selling pressure. A longer lower wick signals that buying pressure is growing, and a bullish outlook is on the horizon. However, the nearing resistance levels are crucial to suggest a sustained upside break. In the meantime, the appetite for upside remains muted, as evidenced by low volumes, which could mean prices will remain subdued from now on.
NY 2nd Month Coffee Futures
NY coffee futures held their nerve yesterday as moderate buying pressure triggered a close at 358.95. The MACD diff is negative and converging, and the stochastics have converged on the upside and are now rising out of the oversold – a strong buy signal. While the indicators suggest a continued growing buying appetite in the near term, yesterday’s inside candle indicates a continuation of the recent sideways trend, albeit with a moderate upside skew. A break above 360 could signal further upside momentum, setting the stage for prices to potentially break above 380. Conversely, a fall below the 350.55 support could trigger losses to the 100 SMA of 337.50. The indicators suggest growing upside momentum, and the inside candle may indicate a pause before the trend’s continuation.
Ldn 2nd Month Coffee Futures
Ldn coffee futures held their nerve yesterday as marginal downside momentum saw prices close at 4186. The %K and %D are flattening out in the oversold, a sign of stalling downside pressures. The MACD diff is negative and flat, further underscoring a lack of appetite out of current ranges. On the upside, prices need to take out the shorter-term moving averages of 10- and 40-day at 4227 and 4256, respectively, before targeting the 4338 level. On the downside, the 100-day moving average at 4082 is supporting prices from a downside perspective. With the 10 SMA crossing below the 40 SMA, a death cross, the upside appetite is likely to be capped in the near term.
NY 2nd Month Cocoa Futures
NY cocoa futures continued to decline yesterday after struggling to break above the trend resistance level, causing the futures to close at 6796. Yesterday’s break below the 7000 mark is a key indicator, with the support at 6720 now a critical support level to assess whether the descending triangle formation is likely to break out on the downside and see major downside pressures towards new lows. The indicators suggest further marginal weakness in the near term, with %K/%D edging lower in the oversold territory, while the MACD remains negative. On the upside, the trend resistance and the 10 SMA at 7057 converged, pressuring prices lower. Near-term trading will be crucial to assess whether we will see a sustained break lower.
Ldn 2nd Month Cocoa Futures
Ldn cocoa futures softened yesterday, finding support above the 469 level – a July low. The market closed at 4746. The stochastics continue to soften into oversold territory, and the MACD diff remains negative and flat day-on-day, struggling to indicate a clear outlook. A break below the current support level would bring the 4489 mark into play, confirming the descending triangle formation and marking an October 2024 low. On the upside, futures need to gain back above 4930, a robust trend resistance level, to confirm upside momentum. The reaffirmation of support could trigger gains towards the key level at 5000, which would strengthen the trend in the long run on the upside. Yesterday’s weakness suggests a continued momentum on the downside, with the 4698 support being crucial in determining the longer-term price outlook.
