NY Sugar 2nd Month Futures
NY sugar futures buckled yesterday as selling pressure triggered a test of support below the 10DMA and around trend support. The market closed at 13.44. The indicators are starting to soften as the stochastics fall out of overbought and the MACD diff weakens but lacks conviction. To confirm the double top and rejection into robust resistance at 13.80, futures need to break trend support and then target 12.71 where the 40 DMA stands. Superseding this level stands support at 12. Dips have been well supported recently and this could remain the case, keeping the recent trend intact. To confirm the outlook of higher prices, futures need to break above 13.80 and then target 14.30. We anticipate a reaffirmation of trend support today but if this level holds, this could benefit the upside trend in the longer run.
Ldn Sugar 2nd Month Futures
Ldn sugar futures sold off yesterday after prices failed into resistance at 380, helping to confirm the rejection of the 61.8% fib level at 383.43 in the previous sessions. The market closed at 373.10. The stochastics have given a sell signal and the MACD diff is negative suggesting we could see lower prices in the immediate term towards the 50% fib level. A break of this level could trigger losses back towards the 40 DMA and then the 100 DMA at 347.80. Previous failures 380 suggest that this level is robust. If support at the 50% fib level holds firm we could see prices push back towards 380, however in order to confirm the upside trend and to regain upside conviction, prices need to take out this level and then target 400 in the long run. We expect prices to weaken in the near term.
NY Coffee 2nd Month Futures
NY coffee futures surged yesterday as protracted buying pressure prompted a test of resistance at 121.50 and we closed at 121.05. The indicators are starting to improve once again and we may have a buy signal on the horizon from the stochastics. Yesterday’s full candle, in conjunction with the previous day’s hammer suggests a resumption in upside momentum. In order to confirm these futures need to take out immediate resistance at 121.50 and then target 125, before the robust level at 129.51. On the downside, prices have struggled above 121.50 and 125, increased apprehension amongst traders around this level could trigger losses back towards 115. We expect futures to improve in the immediate term through 121.50.
Ldn Coffee 2nd Month Futures
Ldn coffee futures gained ground yesterday as intraday trading caused futures to challenge resistance at 1400, this level held firm and we closed at 1396. The stochastics are rising towards overbought but the MACD diff is negative and lacks conviction. The upside tails above 1400 suggest lack of appetite for prices at this level but if prices hold above 1400, this could set the scene for higher prices towards 1450 helping to confirm the bullish engulfing candle. Conversely, repeated rejection of prices at 1400 could trigger losses back to 1365 at the 10 DMA before the more robust support level at 1331. We expect prices to edge higher today but the upside tails at this level remain a threat to the move.
NY Cocoa 2nd Month Futures
NY cocoa futures consolidated yesterday as intraday trading triggered a test of support at 2400 and closed at 2445. The indicators are falling towards oversold and the MACD diff is negative and diverging suggesting lower prices in the near term. A break of support at 2400 would set the scene for losses towards the 40 DMA at 2295. Superseding the level is previous trend resistance and if the market holds this level, futures could trigger gains back towards 2590 in the long run. On the upside, if futures can gain a footing above the 200 DMA this could trigger gains towards the recent double top at 2535. The reaffirmation of support at 2400 will keep momentum on the upside but prices need to push back above the 200 DMA.
Ldn Cocoa 2nd Month Futures
Ldn cocoa futures were supported below 2200 yesterday, prompting a test of support at the 100 DMA. The stochastics are falling towards neutral territory and the MACD diff is converging on the downside suggesting lower prices in the near term. The shooting star candle and the two hanging man candles suggest we could see prices weaken back towards 2100 in the medium term. On the upside, if prices continue to be well supported below 2200 we could see prices take out the recent high at 2272 and then target 2300. Activity lacks conviction but activity holds above key support improving the outlook on the upside in the longer run.
