NY 2nd Month Sugar Futures
NY sugar futures softened yesterday after testing resistance at 19.00. The market closed at 18.77. The stochastics are rising yet seem converging, with %K tailing off in the overbought territory, and the MACD diff is positive and diverging, highlighting recent strength in prices. A break below the 18.53 level would bring into play the 10 DMA at 18.09, which could set the scene for trend support at 17.87. On the upside, futures need to gain above 19.00 – the March 2017 highs - in order to confirm upside momentum. The reaffirmation of support here could trigger gains towards the level at 19.15; this could strengthen the trend in the long run on the upside. The short candle body after a strong bullish candle points to market uncertainty about higher prices, and we could see futures soften in the near term.
Ldn 2nd Month Sugar Futures
Ldn sugar futures softened marginally yesterday as selling pressures prevailed during the day, causing futures to test appetite at 478.80 before closing at 470.40. The stochastics are rising, %K/%D is converging on the downside. Likewise, the MACD diff diverged on the upside, signalling growing buying pressures. To confirm the outlook for higher prices, futures need to break above the resistance at 478.80, which could set the scene for futures to take out the 482.60. On the downside, the market needs to take out support at 469.60 and then support at 10 DMA at 461.38, confirming the double top formation. The 10 DMA level continues to support the futures on the downside and has crossed above both 40 and 100 DMA levels. Whilst indicators point to higher prices in the near term, we believe the resistance at 478.80 is robust, and gains will be capped on the upside.
NY 2nd Month Coffee Futures
NY coffee futures edged lower yesterday as intraday trading caused prices to fail above 212.40 before closing at 204.60. The stochastics are rising, yet converging, as the MACD diff is positive and diverging, highlighting the recent bullish trend. Buying pressure waned yesterday, but the indicators are still positive, the bulls need to break above 217.85 in order to reaffirm upside conviction. On the downside, if selling pressure continues into today, this could prompt a test of 200. A break below this level would bring into play a test of 23.6% fib level at 185. We expect futures to push lower in the near term as they struggled above key resistance at 212.
Ldn 2nd Month Coffee Futures
London futures weakened yesterday as selling pressure prompted a close at 1940. The stochastics are rising marginally but seen converging on the downside, yet still remaining in the overbought area. The MACD diff is positive and diverging, confirming the recent trend of moderate bullish momentum. Yesterday’s full candle and the bearish engulfing pattern formation suggest a strong appetite for lower prices, and we could see futures continue to edge lower in the near term down to 1906. Secondary and tertiary supports stand at 10 DMA at 1824 and 23.6% fib level at 1815. Conversely, support around 1940 could set the scene for higher prices back to 1993. A break above that level would help to gain upside conviction. We believe that there is an appetite for lower prices in the near term.
NY 2nd Month Cocoa Futures
NY cocoa futures edged higher yesterday as intraday trading saw prices break resistance at 2434. The market closed at 2438. The RSI is rising, and %K/%D is positive and diverging, edging towards the overbought. The MACD diff is positive and diverging, pointing to an outlook with higher prices. The indicators point to further bullish momentum and to confirm the rejection of the resistance; prices need to take out 100 DMA at 2464. A break above this level towards trend resistance at 2497 would confirm the strong bullish momentum. Conversely, appetite for prices below 2434 could trigger a test of 40 DMA at 2384, secondary support stands at 10 DMA at 2366. A short candle body after three strong bullish candles suggests uncertainty about higher prices, however, a break above a robust resistance level points to an acceleration of bullish momentum in the near term. We believe that prices will strengthen today.
Ldn 2nd Month Cocoa Futures
Ldn cocoa gained ground yesterday as buying pressure triggered a close on the front foot at 2342. The stochastics are rising towards the overbought, as the MACD diff is positive and diverging, signalling a buy trend in the near term. This suggests we could see higher prices towards the trend resistance, but the market needs to take out immediate trend resistance at 2350 beforehand. On the downside, if the support around 100 DMA at 2300 is taken out, we could see prices retreat back through to 40 and 10 DMAs at 2260 before 2250. Longer upper wick on Tuesday points to the appetite for higher prices, however, futures need to take out 2350 in order to confirm the outlook on the upside.