NY 2nd Month Sugar Futures
NY sugar futures edged lower yesterday after prices failed into previous trend support and closed at 13.79. The stochastics are falling with the %K in oversold territory, the MACD diff is negative but is not diverging. The DMI and ADX are starting to improve on the downside but futures need to break below support at 13.79 to improve the outlook of lower prices to 13.60, the 100 DMA is at 13.47. We expect this level to provide support in the medium term. However, a breach of this level would help confirm the descending triangle and shooting star candle, and rejection of 14. On the upside, futures have been well supported below the 76.4% fib level but the market needs to break above 14 and then 14.17 in order to regain upside conviction. The long term trend is on the upside, and the recent correction and reaffirmation of support at 13.79 could strengthen the outlook of higher prices in the medium term.
Ldn 2nd Month Sugar Futures
Ldn sugar futures consolidated yesterday as intrday trading saw an inside day formed. Support at 390 and this triggered a close at 393.80. The market has been supported at 390 but the stochastics are falling towards oversold. The MACD diff lacks conviction and in order to regain downside momentum, futures need break below 390 and then challenge 383.43, this would confirm the bearish engulfing candle. The 100 DMA at 380.62 could indicate a change in trend, and help to confirm the descending triangle. The long term trend is on the upside, dips have been well bid and the reaffirmation of support at 390 could trigger gains back to 400 with the recent high the upside target at 410. We anticipate the long term trend to continue but futures need to gain a footing above 400.
NY 2nd Month Coffee Futures
NY coffee futures consolidated yesterday as prices failed to gain a footing above 120, this triggered a close at 119.25. The stochastics are falling towards oversold territory, the MACD diff is negative but lacks conviction at this time. The upside tails above 120 could trigger losses back towards 116.10 where the 40 DMA. Secondary support stands at 115 and as mentioned previously this level is key, a break of this support level would confirm the descending triangle and may set the scene for lower prices to 110. On the upside, to confirm support at the 40 DMA and the bullish candle we saw on Monday, the market needs to take out 120 and hold abvoe the 121.50. This would improve upside momentum, and bring into play the double top at 124.15. Futures need to break above 124.15 in order to confirm the outlook of higher prices.
Ldn 2nd Month Coffee Futures
Ldn coffee futures consolidated yesterday as prices tested support and resistance, however, both of these levels held firm and the market closed 1345. The stochastics are falling with the %K stochastic in oversold territory, the MACD diff is negative and diverging, this could trigger losses through 1330, which would pave the way for lower a challenge of the 50% fib level at 1294, this would confirm the descending triangle. Yesterday's inside day suggests indecision in the market, if support at 1340 holds firm this could trigger gains towards 1356 before targeting 1398. The upside tails, long legged doji and weak indicators suggest we could see lower prices in the near term back but support at 1330 is key.
NY 2nd Month Cocoa Futures
NY cocoa sold off sharply yesterday, as protracted selling pressure triggered a breakthrough of 61.8% fib support, and a close on the back foot at 2575. The stochastics are falling, and the RSI has also seen lower. The MACD diff is negative and diverging, suggesting increasing selling pressure; this could set the scene for lower prices towards the 2523 support level. A break below this would confirm the trend, and may set the scene for a challenge of the 50.0% fib level. On the upside, resistance at 2675 has proven to be strong, and a break above that level would strengthen the bullish momentum. This could also trigger gains towards the 10 DMA. The bearish engulfing pattern suggests an impeding market downturn, and we expect prices to continue to fall in the near term.
Ldn 2nd Month Cocoa Futures
Ldn cocoa futures sold off yesterday as lack of appetite for higher prices helped to confirm the rejection of Monday’s high; the market closed at 2323. Stochastics are negative but starting to converge, and the RSI has edged higher suggesting waning selling pressures. The MACD diff is negative and diverging, supporting the outlook for negative prices. The close near the lows suggests strong selling pressure in the near term, however, the mix in the indicators suggest indecision in the market. A break below the 2307 level could set the scene for a test of support level at 2279. Conversely, support around 2400 would help reaffirm the trend on the upside. If the futures break through this level, prices could test resistance at 10 DMA in the medium term. The downside risks prevail, however the market needs to confirm a break below the key support for stronger bearish momentum.