NY 2nd Month Sugar Futures
NY sugar futures sold off on Friday after investors rejected prices above 14, prompting a close below 10 and 40 DMAs at 13.92 and 13.98 respectively, at 13.78. The stochastics are falling, with RSIs in neutral territory; the %K/%D converged on the downside and edging close to the oversold territory, suggesting a short-term negative trend. The MACD diff is negative and diverging, indicating improving sentiment on the downside. To confirm the bearish candle, prices need to break below the support level at 13.80 before the 13.57 level. Secondary support stands at 100 DMA 13.53, a break below would confirm the three black crows formation. On the upside, to regain upside conviction, futures need to close back above 14.00 and then 14.27 in the near term. Near term momentum is on the downside, the close below two shorter-term DMA confirms this trend.
Ldn 2nd Month Sugar Futures
Ldn sugar futures failed into the 10 DMA at 394.73, and this triggered a challenge of support at 391.10, the market closed at 391.60. The stochastics are falling, with the %K/%D converging down to the oversold level. The MACD diff is negative and diverging, suggesting lower prices in the near term. The rejection of previous trend support outlines a rejection of higher prices, but futures need to take out support at 391, before targeting 390. A break below this level would set the scene for lower prices towards the 61.8% fib level at 383.43 and outline a change in trend. On the upside, support for prices above 10 DMA could trigger gains back to 396 before targeting the 40 DMA level at 398.82. The key level on the upside is 403, and a break above this level would regain upside conviction. However, near term momentum is on the downside, and we expect further softness.
NY 2nd Month Coffee Futures
NY coffee softened on Friday as protracted selling pressure prompted a close above the 38.2% fib level of 121.50 at 121.60. The stochastics are rising with the %K/%D converged on the upside, the gap between them suggests further momentum on the upside. The MACD diff is negative and is converging, suggesting waning selling pressure; the DMI remains broadly positive. The red candle body being above the previous day’s green suggests that the bears have taken over the sessions; however, prices remained elevated, confirming the appetite for higher prices. In order to confirm the outlook of higher prices, futures need reaffirm support at 124.15 and then take out last week’s highs in order to regain upside momentum. To confirm the outlook for falling prices, the market needs to break below the 100 DMA at 116.57, which could set the scene for a test of 50.0% fib level at 115.02. Near term momentum favours the upside, and we expect this to remain the case in the near term.
Ldn 2nd Month Coffee Futures
Lnd coffee edged higher on Friday as intraday trading caused futures to test appetite for prices above 40 DMA at 1359, the market closed below the 10 DMA level of 1362 at 1357. Stochastics are rising, and %K/%D converged on the upside, confirming positive momentum. The MACD diff is negative and converging, suggesting waning selling pressure. The DMI and ADX negative outlines the bearish trend we have seen in recent weeks, and the indicators converging suggests an end to that trend in the near term. To maintain positive momentum, prices need to close above 1378 and then target 1422, which is the last weeks’ highs. On the downside, the rejection of prices above 1356 could trigger losses back to the 61.8% fib levels at 1337 before targeting 1314. Buying pressure remains weak; however, indicators point to an end of the selling pressure, and the doji candle confirms market uncertainty. The reaffirmation of support above 40 DMA could strengthen the outlook of higher prices.
NY 2nd Month Cocoa Futures
NY cocoa futures consolidated on Friday as buying pressure prompted resistance at the 10 DMA triggering a close at 2622. The stochastics are rising, with the %K leaving the oversold territory, and converging with %D on the upside, outlining the improvement in positive sentiment. The MACD is negative and converging, supporting the outlook for waning selling pressure. In order to confirm the full candle on the upside, and the positive indicators, prices need to take out the 10 DMA at 2632 today, which could pave the way for a test of the 2675 resistance level. On the downside, a break below 2523 could trigger further losses towards the 40 DMA at 2503. A breach of this level would confirm the downside trend and may prompt a challenge of 2468. A close back above 61.8% fib level at 2612 today would regain upside conviction and pave the way for gains next week.
Ldn 2nd Month Cocoa Futures
Ldn cocoa futures gained ground yesterday after prices found support at 2279, triggering a close at 2354, off the high at 2366. The stochastics are rising, with %K leaving the oversold territory and converging up the upside with 5D. The MACD diff is negative but is starting to converge, suggesting we could see futures test support 2279 once again, the ADX is rising on the upside suggesting a strengthening trend, and this could prompt a break of resistance at 10 DMA at 2377. On the downside, in order to confirm lower prices, futures need to close below the current support and 40 DMA at 2261. The full bullish candle on Friday engulfed two previous day’s prices, suggesting a strong appetite for higher prices. The 40 and 100 DMAs have been diverging, suggesting a positive trend but this is not a proactive signal.