NY 2nd Month Sugar Futures
NY sugar futures edged lower yesterday as futures are capped by the 16.00 resistance level while also holding above the previous low of 15.62 and closing at 15.78. The stochastics are falling back towards the oversold territory, as the MACD diff is negative and diverging, suggesting lower prices in the near term. To confirm the bearish indicators and rejection of prices above 16.00, futures need to take out support at 15.62 and then target new lows of 15.50. On the upside, futures need to close above 10 DMA at 16.11 and then target the 40 DMA at 16.52 to confirm the outlook for higher prices towards 16.64. The long lower wick indicates growing uncertainty for lower prices, suggesting that markets are likely to remain cautious as they approach the 15.62 level in the near term.
Ldn 2nd Month Sugar Futures
London sugar futures edged lower yesterday, closing at 450.30. The indicators continue to favour the downside, with %K/%D diverging towards the oversold area, suggesting growing selling pressures. The MACD is also positive and converging, about to slip into the negative territory – a strong sell signal. A break below the 450 level would bring into play the recent sessions’ support level at 442.60. Prices have been relatively well supported above this level, and in order to indicate an improvement of market sentiment on the upside, futures need to gain a footing above the 10 DMA at 455.69 and then target 460 in the near term. Yesterday’s candle formation suggests that, despite weakness during the day, buyers had recouped some of their losses. If the 450 support does not hold, we could see prices edge below to 440.
NY 2nd Month Coffee Futures
NY coffee futures opened higher yesterday, but resistance of 367 has once again capped the upside, prompting futures to close lower on the day at 360.40. The stochastics are seen falling, with the %K/%D converging on the downside, a strong sell signal. The MACD diff is now negative and diverging, which could point to growing selling pressures in the near term. A break of the 360 support could trigger losses through 350, with the tertiary level at 340. On the upside, a break above 367 could set the scene for bullish momentum towards 380. The indicators suggest a potential reversal of momentum on the downside; however, futures must first break support at 360 to confirm this shift.
Ldn 2nd Month Coffee Futures
Ldn coffee futures held their nerve yesterday as intraday trading saw prices close below the 4500 level at 4472. The %K is now overbought and continues to rise. The MACD diff is positive and diverging, suggesting further appetite for higher prices; however, futures need to break above the 4500 level first to trigger momentum. A break above this level towards the resistance at 4664 would confirm the strong bullish momentum. Conversely, appetite for prices below the 40 DMA at 4415 could trigger a test of support of the 10 DMA at 4359. A long-legged doji candle indicates indecision about either direction as the market struggles above 4500. The indicators suggest a further rise in prices, but futures need to close above this level to indicate further gains.
NY 2nd Month Cocoa Futures
Prices continued to weaken yesterday as moderate selling pressure triggered a close below the critical 6000 support level at 5992. The stochastics remain heavily oversold and falling, signalling a continuation in the bearish trend. The MACD is negative and converging. However, yesterday’s doji candle formation suggests market indecisiveness for now. To confirm the continuation of the downside trend, prices must break below the current support level and then consistently target new lows. Conversely, a break back above 6000 could set the scene for a test of the 10 DMA at 64730. We expect prices to edge lower in the near term.
Ldn 2nd Month Cocoa Futures
Ldn cocoa futures held their nerve yesterday as intraday trading saw futures test appetite at previous lows. This level held firm, futures closed at 4232. The stochastics remain oversold, and the MACD diff is negative and diverging, signalling a continuation of selling pressures. To confirm the outlook for lower prices, futures need to break below 4280, which could set the stage for futures to break through the 4000 level. On the upside, the market needs to break above 4296 and then clear the resistance at 4489. Recent trading suggests that while markets are becoming more cautious about new lows, there are few indicators that prices will sustainably reverse on the upside in the near term.
