NY 2nd Month Sugar Futures
Futures sold off yesterday after prices failed above 14.17, prompting a close at 13.97. The stochastics are starting to rise, and the MACD diff lacks conviction but is also negative. The RSI is falling as well, and the rejection of prices above 14.17 could set the scene for lower prices towards the lower trend channel, before targeting 13.60. The close below the 40 DMA yesterday could increase downside impetus. On the upside, if futures hold above the 76.4% fib level, this could trigger gains back to 14.17. In order to regain upside momentum, futures need to close and hold above this level. If futures hold above trend support, this could strengthen the case for higher prices in the long run, and take out the recent high at 14.56. Yesterday's close does question the recent bullish engulfing candle, but we anticipate prices to edge higher.
Ldn 2nd Month Sugar Futures
Ldn sugar futures posted an inside day, the market failed into 403 which prompted a close below 400 at 396. The stochastics are rising, and the MACD diff is converging on the downside, suggesting improving buying pressure. In order to confirm the outlook of higher prices, futures need to close above 403 and then target the recent high at 410. 410 is the key level on the upside, a breach of this level would confirm the reaffirmation of support at 390 and long term trend. On the downside, rejection of prices at 403 could set the scene for lower prices through 390 towards the 61.8% fib level and 100 DMA at 381.55. The inside day indicates we could see prices edge higher in the near term.
NY 2nd Month Coffee Futures
NY coffee futures gained ground yesterday as protracted buying pressure prompted a break above the 38.2% fib level at 119.83 to close on the front foot at 121.05. The stochastics are rising, and the %K/%D are converging, suggesting a buy signal in the near term. The MACD diff is also seen converging, however, lack conviction to suggest an improving sentiment. To confirm the bullish candle, futures need to break above the 38.2% fib level at 121.50 and then target the recent highs at 124.1. On the downside, the break below the 100 DMA at 116.47 could set the scene for lower prices towards the support of 50 fib level at 115. However, the market struggled below that level in recent weeks, and the bullish engulfing pattern suggests a strong buy signal. Near term support stands at 40 DMA, and a breach of this level could trigger losses towards 61.8% fib at 108.55.
Ldn 2nd Month Coffee Futures
Lnd futures consolidated yesterday after prices failed above 1353, triggering prices to close at 1351. The stochastics are improving, with %K/%D rising out of the oversold and converging to the upside, signalling a change of trend for higher prices. The MACD diffs are negative and converging, confirming the waning selling pressure. Yesterday’s candle pierced through the support at 1331, and the lows reached 1317, the close just off the high confirms the preference for higher prices. To confirm the upside trend, prices need to break above the 40 DMA at 1357, and we could see the prices test the 100 DMA level at 1361. On the downside, the break below the 61.8% fib level at 1337 would confirm the trend, and prices would need to take out 1314 for a solid bearish momentum. The downside tails outline the downside threat, but we would need to see a break below support level to confirm the trend for lower prices.
NY 2nd Month Cocoa Futures
Cocoa futures consolidated yesterday as prices found support at 2523 level and closed at 2567. The RSI is rising, and %K/%D are seen converging, with %K seen in the oversold territory, highlighting the waning selling pressures. The MACD diff is negative and diverging. The smaller candle body comparing to previous day suggests a lack of conviction in the bullish trend; however, the indicators point to a change in momentum in the near term. To confirm the rejection of higher prices, futures need to test and break 50 fib level at 2513, which could set the test of 40 DMA at 2496. Conversely, the break above the 61.8% fib level at 2612 would suggest an improved outlook on the upside. Prices need to close above 10 DMA at 2646 and then take out this week's high at 2726 to confirm the outlook for higher prices.
Ldn 2nd Month Cocoa Futures
Prices weakened yesterday as moderate selling pressure triggered a close below the 2310 support level; the market closed at 2298. The stochastics are falling; however, the %K/%D have entered into oversold territory, signalling a potential change in trend. The MACD is negative and diverging, and the doji candle formation supports market indecisiveness. Dips in the market have been well bid in the last couple of sessions, but in order to confirm the ascending triangle trend prices need to break above the current resistance at 2310 and then 2346. Conversely, a break below 2279 support line could set the scene for a test of 40 and 100 DMA. We expect prices to consolidate recent gains today and remain on the front foot.
