NY 2nd Month Sugar Futures
NY sugar futures edged lower on Friday, but prices struggled to break below 40 DMA once again, and the market closed at 19.86. The stochastics are rising, but converging, with %K/%D seen converging, on the downside back to the oversold, and the RSI fell significantly. The MACD diff is negative and remained unchanged day-to-day, suggesting a pause in the previous trend. The reaffirmation of support above 10 DMA at 19.96 could trigger gains towards the trend resistance at 20.61 and 21.00. Conversely, a breach of support at 40 DMA at 19.82 may set the scene for lower prices to 19.44. If futures take out of this level, this would reaffirm the trend on the downside. The 10 DMA is set to cross below the 40 DMA, a death cross, and we expect prices to weaken in the near term.
Ldn 2nd Month Sugar Futures
Ldn sugar futures failed above 521.20 once again on Friday as prices closed at 509.70. The stochastics are rising, yet converging, with %K tailing off near the overbought territory. The MACD is negative and converging, painting a mixed picture in comparison to the stochastics. The rejection of higher prices may prompt a break back towards support at 10 DMA at 503.28, a subsequent breach of this level could trigger losses towards 500. On the upside, a break of 521.20 may prompt futures to retest March 2017 highs at 525.63. Long upper and lower wicks point to uncertainty about the direction of momentum; however, the weakness during the day prevailed, confirming the double top formation. We expect prices to soften in the near term.
NY 2nd Month Coffee Futures
NY coffee futures have failed above 10 DMA resistance on Friday, and this triggered a close at 186.40. The stochastics are falling towards the oversold, and the MACD diff is negative, both failing to point out an outlook. The RSI is edging lower, suggesting the number of bearish trades is increasing, and, with futures struggling to break above 10 DMA, we could see prices edge lower to 180. This could trigger a test of support at 38.2% fib level at 174.74. On the upside, rejection of resistances around 10 and 40 DMAs at 188.68 could trigger gains back towards 191.22. A breach of this level would confirm the break out of the symmetrical triangle. A death cross formation signals further downside pressures in the near term.
Ldn 2nd Month Coffee Futures
Ldn coffee futures gained ground on Friday as buying pressure triggered a close on the front foot at 2151. The stochastics are rising, with the %K/%D diverging towards the overbought area, as the MACD diff converged on the upside – a clear buy signal. This suggests we could see higher prices in the near term towards 2200, but the market needs to take out immediate resistance of 2173 – the August 2017 highs. On the downside, the candle found support at the previous day’s close of 2107, and if the prices break through this level, we could see futures retreat back through the 10 DMA at 2082. The three white soldier formation is a bullish signal, and with Friday’s long candle and close near the highs, we expect further upside momentum to materialise today.
NY 2nd Month Cocoa Futures
NY cocoa futures held their nerve on Friday, causing the market to close at 2688. The stochastics are rising marginally, with %K/%D diverging towards the overbought, and the MACD diff is negative and converging, suggesting higher prices in the near term. To confirm the outlook of higher prices, futures need to close above 2700 and then target 2726. The 10 DMA is closing in and supporting prices on the upside. On the downside, break below this level could set the scene for 2600, the recent lows. A bullish candle with a narrow body and longer lower wick after a bearish doji candle points to uncertainty about the outlook, but the futures need to break out of current resistance to confirm the near-term outlook on the upside.
Ldn 2nd Month Cocoa Futures
Ldn cocoa futures held the nerve on Friday; however, prices struggled above 10 DMA and closed on the back foot at 2496. The stochastics are falling, with %K/%D seen diverging on the downside. The MACD is negative and diverging, confirming the strengthening appetite for lower prices. The rejection of higher prices may prompt a break back towards support at 2450, a subsequent breach of this level could trigger losses towards 40 DMA at 2437. On the upside, a break of 10 DMA at 2493 may prompt futures to test trend resistance at 2513. A subsequent breach of this level would prompt prices to regain upside momentum in the near term. A narrow candle body points to a lack of appetite for prices above 10 DMA, and the indicators point to downside pressures in the near term.
