NY 2nd Month Sugar Futures
NY sugar futures softened yesterday after a sharp gap higher on Wednesday, which saw prices push above the 15.50 level. Over the last couple of sessions, futures have attempted to break above the critical 16.00 resistance but have repeatedly failed to hold above it, settling yesterday at 15.77. This suggests that technical resistance remains firm, while the softer price action points to waning upside momentum.
The indicators confirm the risk of near-term weakness, with %K/%D starting to tail off in overbought territory, while the MACD diff is still rising in positive territory as it catches up with recent price action. The recent price jump alongside thin volumes is leaving the move vulnerable to profit-taking if 16.00 continues to cap the upside.
We expect prices to be close to a near-term ceiling. Repeated attempts to breach 16.00 are likely to be met with selling pressure, keeping futures resilient but capped on the upside.
Ldn 2nd Month Sugar Futures
Ldn sugar futures attempted to breach the critical 480 resistance yesterday but struggled to sustain gains above this level, settling broadly in line with Wednesday’s close around 475. The stochastics remain overbought but are starting to tail off, suggesting that bullish momentum may be beginning to fade from a technical perspective.
The volume profile remains firm, underscoring that the market is still resisting higher prices. This, alongside the shooting star formation, suggests that yesterday’s trading activity could mark a near-term peak, with prices at risk of moderating and weakening in the coming sessions.
The key level to watch on the upside remains 480, as the market is currently defending this resistance. A clean break above it could trigger another wave of buying pressure. Conversely, a move back below 460 would open the door to weakness towards the moving-average cluster, with the 10 DMA at 451.62 the key support to watch.
NY 2nd Month Coffee Futures
NY coffee futures weakened yesterday after the recent rally, largely erasing the previous day’s gains while defending the 312 resistance threshold and holding above the 300 support level. The stochastics indicate stalling upside momentum, with %K/%D overbought and flattening, while the MACD diff is positive but also starting to level off. This suggests the market may struggle to extend higher in the near term.
To indicate a trend shift towards stronger bearish pressure, futures need to break below 300 before attempting to test the moving-average cluster around 282. For now, resistance at 312 is likely to hold, leaving the outlook skewed towards either moderation and sideways trading or a mean-reversion move lower, depending on whether 300 gives way.
Lnd 2nd Month Coffee Futures
Ldn coffee futures rallied yesterday and attempted to breach the 3800 level; however, strong selling pressure later in the session saw the market settle broadly unchanged on the day at 3783. The stochastics suggest that upside momentum is weakening, with overbought risks easing and the indicators no longer extending higher.
The rejection of prices above 3800 formed a candle with a narrow body and a long upper wick, suggesting the market tested and rejected near-term resistance. If prices were to break above this level, it could trigger a move towards 4000, the February high. To confirm the shooting star formation, futures need to take out the 10 DMA at 3636, followed by robust support at the 100 DMA at 3504. A break below this level would confirm the outlook for lower prices. In the meantime, we expect prices to moderate and start to soften towards the 10 DMA.
NY 2nd Month Cocoa Futures
NY cocoa futures held their nerve yesterday, with intraday trading seeing futures hold support at 5000 but struggle to move decisively in either direction, settling at 5036. The indicators, however, paint a clearer picture. The stochastics are falling, with %K crossing below %D — a death cross — indicating upcoming weakness. The MACD diff confirms this, remaining positive but weakening.
To confirm the outlook for lower prices, futures need to break below the 5000 support. A move through this level could set the scene for futures to test 4750, where the 200 DMA is now providing robust support and could significantly limit downside potential. Thin volumes also suggest that breaking this level would be challenging without stronger market conviction.
Alternatively, resistance at 5220 has been established in recent days and would need to be broken for the market to attempt a retest of the January highs at 5765.
Ldn 2nd Month Cocoa Futures
