NY 2nd Month Sugar Futures
NY sugar futures gained ground yesterday as buying pressure around trend support prompted a close at 12.73. The indicators have started to improve once again as the stochastics test overbought but the MACD diff lacks conviction, the DMI and ADX are falling. The spinning top and yesterday’s candle suggest appetite at trend support, prices remain below key resistance. To confirm the trend on the upside prices need to take out 13 and then target 13.50 this would confirm the bullish engulfing candle and reaffirmation of trend support. We have seen apprehension in the market around 13 could cap gains, in order to indicate a change in trend prices need to break below trend support and then 12. We expect prices to challenge 13 in the near term.
Ldn 2nd Month Sugar Futures
Ldn sugar futures rebounded yesterday as buying pressure prompted a close at 364.60. The stochastics are overbought, the MACD diff is positive and starting to diverge and yesterday’s full candle suggests higher prices in the near term. A break and close above the 50% fib level today would set the scene for a test of 380 nest week, this remains the key level on the upside, and we would need to see a new high from the stochastics and prices to confirm the upside trend since April. Conversely, failure to break above 380 and a rejection of the 50% fib level could trigger a correction to the downside. Futures need to breach support of the 40 DMA and then 38.2% to suggest a change in trend but the key level on the downside remains 334.80.
NY 2nd Month Coffee Futures
NY coffee futures gained ground yesterday as buying pressure triggered a test of resistance at 120, prices failed at this level and closed at 118.25. The stochastics are in overbought territory but are starting to converge, the MACD diff is positive and diverging as the RSI is overbought. The indicators suggest higher prices but the rejection of 120 and the converging stochastics a suggesting lower prices. To confirm the rejection of 120 and lower prices, futures need to break below 115 and the 50% fib level back towards previous trend resistance at 111.25. On the upside, momentum has been strong, but prices need to close above 120 in order to indicate higher prices. The market failed repeatedly at 121 in April and this is a key level on the upside.
Ldn 2nd Month Coffee Futures
Ldn coffee futures edged lower yesterday and consolidated on the previous day. The market was well bid to test 1400 but then failed and closed at 1356. The indicators are starting to soften, the stochastics are overbought but are topping out as the MACD diff is positive and converging suggesting lower prices. In order to confirm the rejection of higher prices, futures need to break below 1331 back to 1300. The upside tails indicate lack of appetite for higher prices but support at 1331 has kept the market on the front foot. The reaffirmation of support will improve the outlook of higher prices in the long run but futures need to gain a footing above 1400 in order to confirm the trend. Near term momentum and candles indicate we could see prices correct to the downside.
NY 2nd Month Cocoa Futures
NY cocoa futures edged higher yesterday as intraday saw price fail into 2400 and then close at 2345. The stochastics are in overbought territory but are converging suggesting we could see prices retreat in the near term towards previous trend support. The MACD diff is positive and diverging though which suggests higher prices. The shooting star candle and the converging stochastics could indicate a retracement back to previous trend support if this level holds firm this would strengthen the case for higher prices back towards the 200 DMA at 2470 in the longer run. Conversely, if support for prices continues today a close above 2400 would indicate a test of 2470 sooner.
Ldn 2nd Month Cocoa Futures
Ldn cocoa futures edged lower after prices failed into 2140 and closed at 2111. The stochastics are rising further into overbought territory and the MACD diff positive and converging on the upside, this suggests higher prices but the shooting star candle indicates a retracement in the immediate term. In order to confirm the shooting star candle prices need to break 2100 before targeting the 40 DMA at 2058. Tertiary support stands at 2000. On the upside, prices need to take out 2160 and then the 100 DMA at 2182 to suggest a change in trend. A break of the 100 DMA would help confirm the three white soldiers.
