NY 2nd Month Sugar Futures
NY sugar futures opened below the 10 and 40 DMAs but gained ground during the day as buying pressure triggered a close at 19.84. The stochastics are falling after %K/%D giving a sell signal, the MACD diff is negative but lacks the conviction. This suggests we could see lower prices in the near term, but the market needs to take out immediate support of 19.44 before targeting 19.00. On the upside, the candle found support at 19.44, and if this level holds firm, we could see prices gain back through the 10 and 40 DMAs at 19.94 and 20.02, respectively. This would confirm a triple bottom candle formation around 19.44. Indicators point to lower prices in the near term, but the futures need to break below the near term support to confirm that.
Ldn 2nd Month Sugar Futures
Ldn sugar futures gained ground yesterday as selling pressure prompted a close on the front foot at 511.20. The RSI is rising, while %K/%D stochastics are diverging on the downside. The MACD diff negative but lacks the conviction to point out an outlook. Appetite for prices above 500, and the bullish engulfing formation suggest higher prices towards 520, however, futures struggled above that level. The 10 DMA has provided robust resistance in the last two sessions, and if futures can gain a footing above this level, we could see the bulls target 521.20, the recent highs. On the downside, if support at 40 DMA at 500.26 does not hold, this could set the scene for lower prices to 490. The indicators still favour the downside, and we expect this to remain the case today.
NY 2nd Month Coffee Futures
NY coffee futures rallied yesterday as protracted buying pressure triggered a close above 200 at 201.45. The RSI is rising, while %K/%D is diverging on the upside, the %K is now in the overbought. The MACD diff is positive and diverging, confirming rising buying pressures. On the downside, a break below the key support level of 23.6% fib level at 191.22 could trigger losses back towards 10 DMA at 190.68, a break below which would confirm the outlook of lower prices in the longer term. On the upside, a complete break above 200 could trigger gains through 206.35 towards 210. Long candle body points to more certainty in the bullish momentum, and a close above 200 confirmed the outlook for higher prices.
Ldn 2nd Month Coffee Futures
Ldn coffee futures strengthened yesterday as protracted buying pressure prompted a test of the 2151 level to close at 2145. The stochastics have given a sell signal, as %K/%D left overbought territory, highlighting growing selling pressures. The MACD diff is negative and diverging. To confirm another bullish candle, futures need to close above 2127 and then target 2173. On the downside, the break below 2100 could set the scene for lower prices towards the support of 2034. However, the market struggled below that level in recent sessions, and the bullish engulfing pattern suggests a strong buy signal. We believe that prices will strengthen in the near term, however, the trend is pointing to a price softening in the longer term.
NY 2nd Month Cocoa Futures
NY cocoa futures opened lower yesterday but consolidated during the day, testing resistance at 40 DMA. The market closed at 2585. The RSI is rising, but the %K/%D is negative and diverging, soon to enter the oversold territory. The MACD diff is negative and diverging, suggesting growing selling pressure. The indicators point to lower prices in the near term, and to confirm the rejection of the support; prices need to take out 50% fib level at 2534. A break below this level towards 2500 would confirm the strong bearish momentum. Conversely, appetite for prices above the 40 DMA level at 2600 could trigger a test of resistance at 10 DMA at 2639, tertiary resistance stands at 2675. A doji candle signals uncertainty about the outlook for higher prices, and if the futures continue to struggle above 40 DMA, we could see prices edge lower in the near term.
Ldn 2nd Month Cocoa Futures
Ldn cocoa opened below the previous day close but managed to rally yesterday as buying pressure triggered a close on the front foot at 2525. The stochastics continue to fall, with %K in the oversold, as the MACD diff is negative and diverging, signalling a sell trend in the near term. This suggests we could see lower prices towards the 100 DMA support at 2357, but the market needs to take out immediate support 2400 beforehand. On the upside, if the resistance around 2431 is taken out, we could see prices gain back through to 40 and 10 DMAs at 2456 before 2462. Longer upper wick points to the appetite for higher prices, however, futures need to take out 2431 in order to confirm the outlook on the upside.
