NY 2nd Month Sugar Futures
NY sugar futures were well supported yesterday as appetite for futures were supported at the 40 DMA and the market closed at 13.55. The stochastics are rising back towards overbought, and the MACD diff is diverging. The RSI is also improving and yesterday's full candle suggests higher prices in the near term back to 13.80. There is a band of resistance between 13.60-13.80 which is the key level, a break above this level would trigger a breakout of the recent consolidation. The recent rejection of prices at the 76.4% fib level at 13.79, could set the scene for lower prices through the 40 DMA and then 13. Once again, the 100 DMA is the key support level in the medium term. The strong candle yesterday and the activity above key support will keep momentum on the upside.
Ldn 2nd Month Sugar Futures
Ldn sugar futures were well supported yesterday as buying pressure prompted a test of resistance at 380, prices failed above this level and we closed at 379.90. The stochastics are rising further into overbought territory, and the MACD diff is positive is and diverging suggesting higher prices in the near term but futures need to close above 380 and the 61.8% at 383. The full candle yesterday suggests higher prices in the near term. A rejection of prices at 380 would set the scene for lower prices in the near term through the 50% fib level before and then the 100 DMA at 361.57. In the longer term, if futures take out 334.80 would confirm the head and shoulders pattern. We expect prices to improve on the upside but we need to take out resistance at 383 to confirm the trend.
NY 2nd Month Coffee Futures
NY coffee futures were supported yesterday to test resistance at the 10 DMA, this prompted a close at 109.85. The stochastics are rising but are still a negative territory and oversold, the MACD diff is converging on the downside and futures could trigger gains through the 10 DMA and then the 50% fib level at 115, this would help confirm the inverted hammer candle. In the medium term, futures need to close above this level to confirm the outlook of higher prices to 120. The rejection of the 10 DMA could pave the way for lower prices through 108 towards 104.20. We expect prices to consolidate in the near term as support is reaffirmed.
Ldn 2nd Month Coffee Futures
Ldn coffee futures sold off yesterday after prices struggled to gain a footing above the 50% fib level, prompting a close at 1279. The stochastics are falling further into oversold territory as the MACD diff is negative and diverging, indicating we could see lower prices in the near term. The ADX is starting to rise suggesting the trend on the downside is strengthening. Selling pressure could trigger a test of support at 38.4% fib level at 1250.54, a break below this level would confirm the trend on the downside. The previous appetite below 1294 has waned and the bulls need to gain a footing back above 1300 and target 1331. The near term trend is on the downside and we expect this to continue in the near term.
NY 2nd Month Cocoa Futures
NY cocoa futures weakened yesterday after prices failed into the 200 DMA and closed at 2428. The stochastics are falling and are oversold, the MACD diff is diverging on the downside suggesting lower prices through 2400. A break of 2400 could set the scene for lower prices to 2355, where futures were supported in recent months, which helped to confirm the descending triangle. If futures are supported at this level, we could see futures push back above 2523. In the long run, futures need to take out resistance at 2694 to suggest a change in trend.
Ldn 2nd Month Cocoa Futures
Ldn cocoa futures continue to weaken as selling pressure prompted a test of support at 100 DMA at 2184, the market closed at 2182. The stochastics are falling and the MACD diff is diverging on the downside suggesting lower prices. Appetite for prices below 100 DMA has kept the market well supported in recent weeks but the close below the 100 DMA could trigger a sell-off back towards 2100. The selling pressure is outlined by the open being the intraday high but futures need to confirm the outlook on the downside with a convincing break towards 2100. On the upside, if prices can hold above the 100 DMA futures could trigger a correction to the upside. We expect the momentum to remain on the downside.