NY 2nd Month Sugar Futures
NY sugar futures softened on Friday as traders rejected prices above 15.00, prompting a close at 14.77. The RSI is falling, with %K/%D converging on the downside out of the overbought territory. The MACD diff is positive and converging; the ADX is rising outlining the recent rally, but the rejection of the 15.00 suggests there is a lack appetite for higher prices. A break of support at 10 DMA at 14.68 could trigger losses to the support level of 14.52. If this level holds firm, we could see prices trend higher back towards 15.00 in the longer-term. If prices are well supported at 10 DMA, this could prompt a challenge of the 100% fib level of 15.20 and then test 15.29. We expect prices to retreat in the near term; however, a break below the support level is needed to confirm the outlook.
Ldn 2nd Month Sugar Futures
Lnd sugar held the nerve on Friday as intraday trading caused futures to close at 421.10. The RSI is rising marginally, and %K/%D converged on the downside in the overbought area, confirming the change of trend in the near term. The MACD diff is positive and converging, suggesting waning buying pressure. The DMI and ADX outline the positive 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 426 and then target 430, which is the last weeks' highs. On the downside, the rejection of prices above 420 could trigger losses back to the 10 DMA level at 413.73 before targeting 410. Buying pressure remains weak, and indicators point to an end of that momentum but prices remain above near term support. The doji candle confirms market uncertainty. The break of support at 10 DMA could confirm the outlook for lower prices in the near-term.
NY 2nd Month Coffee Futures
NY coffee futures rallied on Friday as protracted buying pressure triggered a close on the front foot at 125.75. The RSI is rising, while %K/%D are converging on the downside. The MACD diff is negative and converging, confirming market uncertainty. On the downside, a break below the key support level of 40 DMA at 122.08 could trigger losses back towards 120, a break below the 100 DMA and then 115 to confirm the outlook of lower prices in the longer term. On the upside, a break above the 10 DMA at 126.49 could trigger gains through 129.50 towards 131.30 – recent sessions' high. Since the beginning of December, the market traded the narrow range and lacked conviction for a trend change; however, a morning start formation highlights that the selling pressure is subsiding, and the bullish outlook is on the horizon.
Ldn 2nd Month Coffee Futures
Lnd coffee futures sold off on Friday after prices failed above the 61.8% fib level, prompting a close on the back foot at 1318. The stochastics are falling back towards the oversold territory, and the MACD diff is also diverging on the downside, outlining the weakness in the market. Selling pressure has been strong and yesterday's close on the low suggests lower prices towards 1310. This support level has been robust, and we expect this level to remain to hold. Alternatively, if prices can gain a footing above the 61.8% fib level at 1337, the bulls could then target 1350 in order to regain upside conviction. We anticipate prices to remain on the back foot in the near term.
NY 2nd Month Cocoa Futures
NY cocoa futures edged lower on Friday after prices failed to break above the 10 DMA at 2489, prompting a close at 2460. The stochastics are falling, with %K/%D edging towards oversold, and the MACD diff is negative, however, lack convictions to suggest the outlook for lower prices. To confirm the bearish indicators and rejection of prices above 2500, futures need to take out support at 2434 and then target 200 DMA at 2416. On the upside, futures need to close above 10 DMA and then test the 50.0% fib level at 2513 in order to confirm the outlook of higher prices towards 2557. We expect futures to weaken in the near term.
Ldn 2nd Month Cocoa Futures
Lnd cocoa futures failed above 10 DMA on Friday as intraday trading caused futures to close at 2225. The stochastics continue to weaken, but the MACD diff lacks conviction. The rejection of prices at 2238 has formed a candle with a narrow body but a long wick on the upside, suggesting an appetite for higher prices, however, lacking conviction to break above the near term resistance. If prices were to break above 10 DMA, this could trigger a test of 100 DMA at 2261 and then 40 DMA at 2305. To confirm the shooting start formation, futures need to take out 2200 and then robust support at 2179. A break below this level would confirm the outlook for lower prices.