NY 2nd Month Sugar Futures
Prices weakened yesterday as selling pressure triggered a close at the 10 DMA At 13.55. The MACD diff lacks conviction and has converged towards neutral territory. The stochastics are falling but remain in overbought territory. The RSI is also falling but the inside day yesterday suggests a continuation of the recent trend. Dips in the market have been well bid but in order to confirm the recent trend, and ascending triangle prices need to break 13.80 and then 14.30. Conversely, to confirm the previous shooting star candles and rejection of resistance at 13.80 the market needs to break below trend support. This would bring into play the 40 DMA at 12.80.
Ldn 2nd Month Sugar Futures
Sugar prices edged lower as intraday trading saw traders reject prices at 380 and closed at 377.70. The stochastics are falling out of overbought but the MACD diff has converged on the upside which suggests waning buying pressure. Rejection of prices at 380 and this could trigger losses back to the 50% fib level, a subsequent breach of this level could trigger a test of 360 with tertiary support at 348.70. On the upside, prices need to take out 383.43 and then target 394.20 in order to confirm the recent trend. A break of 383.43 would suggest a rejection of the inverse head and shoulders.
NY 2nd Month Coffee Futures
Coffee prices consolidated yesterday as intraday trading caused prices to fail struggle above 120 prompting a close at 118.95. The stochastics are rising towards neutral territory as the MACD diff lacks conviction but is now negative once again. The upside tails suggest rejection of higher prices, and yesterday's doji indicates uncertainty in the market. To confirm the rejection of higher prices, futures need to test and break 115. Conversely, the 40 DMA is breaking above the 100 DMA suggesting an improved outlook on the upside. However, this is normally a reactive signal though. Prices need to close above 121.50 and then take out this week's high at 123.85 to confirm the outlook of higher prices.
Ldn 2nd Month Coffee Futures
Futures failed above 1400 once again yesterday as traders rejected higher prices and closed at 1385. The stochastics are rising and are positive as the MACD diff is negative but is no longer diverging. The RSI is elevated and this suggests that momentum is still on the upside. Futures are holding above key support but the market has repeatedly failed above 1400 which has dampened sentiment slightly. Futures need to close above 1400 to regain upside conviction. Repeated rejection of prices above 1400 may trigger losses back to 1350, to regain downside conviction prices need to close below 1330 and then target the 40 DMA at 1303. We expect futures to remain within the recent range.
NY 2nd Month Cocoa Futures
NY cocoa futures buckled yesterday as intraday trading saw prices reject the 200 DMA and then close at 2400. The stochastics are falling as the MACD diff is negative and starting to diverge, the RSI has also fallen back towards neutral territory. The rejection of the 200 and then close at 2400 suggests we may see prices retreat in the near term through 2400 towards 2302. On the upside, support for prices at 2400 may prompt a retest of the 200 DMA and then target the recent highs at 2535 in order to regain upside conviction. We anticipate prices will retreat in the near term as selling pressure strengthens.
Ldn 2nd Month Cocoa Futures
Ldn cocoa futures retreated yesterday as futures failed above 2200, prompting a close below the 100 DMA at 2186. The stochastics are falling towards oversold and the gap between them suggests lower prices and strengthening downside momentum. The MACD diff is converging on the upside and this may trigger losses back towards the trendline at 2145 and then 2100 in the longer term. On the upside, prices need to close back above 2200 and then target 2271 which is the recent high. We expect futures to weaken in the near term heling to confirm the rejection of prices above 2200.