NY 2nd Month Sugar Futures
NY sugar futures sold off yesterday after futures failed above the 19.10 level, prompting a close on the back foot below 100 DMA at 18.69. The stochastics are falling in 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 support at 18.64. If this level does not hold, next level of support is at 18.31. Alternatively, if prices can gain a footing above the 100 DMA level at 18.92, the bulls could then target 10 DMA at 19.40 in order to regain upside conviction. We anticipate prices to remain on the back foot in the near term.
Ldn 2nd Month Sugar Futures
Ldn sugar futures weakened yesterday as lack of appetite for higher prices helped to break the 493.90 support, the market closed at 492.60. Stochastics are diverging on the downside, with %K now in the oversold territory, suggesting the future is oversold and might experience a reversal in trend, but after some near term weakness. MACD diff is negative and diverging, supporting the outlook for deteriorating prices, and the above-mentioned indicators support lower prices. A break below the 485.20 could set the scene for a test of support at 100 DMA at 482.93. On the upside, an appetite above 500 would help reaffirm the bullish trend in the near term up to resistances of 40 and 10 DMAs. The 10 DMA is seen edging lower, about to break below 40 DMA in the near term, confirming the recent selling strength. We believe that the market lacks conviction, and prices should continue to fall.
NY 2nd Month Coffee Futures
NY coffee futures gained ground yesterday as moderate buying pressure triggered a test of 10 DMA once again before the close at 207.00. The stochastics are falling, and the MACD diff is about to converge on the downside, suggesting an end to a positive trend. This suggests we could see lower prices in the near term towards 200, before testing the trend support level at 196.04. On the upside, the candle found resistance at 10 DMA at 206.60, and if the prices break through this level, we could see prices strengthen back through the 209.65 before 217.85. The longer upper wick suggests a lack of appetite above 10 DMA, and if futures struggle to break above that level, we could see prices retreat in the near term.
Ldn 2nd Month Coffee Futures
Ldn coffee held the nerve yesterday as intraday trading caused futures to close at 2120. RSI is rising marginally, but %K/%D is about to converge on the downside, confirming a change of momentum in the near term. Likewise, the MACD is diverging on the downside, confirming growing downside momentum. To maintain another bullish candle, prices need to close above 2127 and then target 2173. On the downside, the rejection of prices above 10 DMA at 2126 could trigger losses back through the 40 DMA at 2096, the longer-term support level. Buying pressure has been weak, and the indicators point to a slowdown of that momentum. The narrow candle body and longer wicks confirm market uncertainty. The break of support at 40 DMA could confirm the outlook for lower prices in the near term.
NY 2nd Month Cocoa Futures
NY cocoa futures weakened yesterday as they failed into the resistance at 2675 and closed at 2611. The stochastics continue to decline, and %K has entered the oversold. The MACD diff is negative and diverging, confirming bearish sentiment. A complete break below support at 38.2% fib level at 2601 would confirm a bearish engulfing candle pattern. This may pave the way for lower prices to 2534 with the tertiary level at 2500. Conversely, the reaffirmation of support above 2600 would suggest higher prices and a close above 2675, setting the scene for higher prices towards 10 DMA at 2695. Yesterday's candle body being larger engulfing three narrowed bodied candles' suggests a growing appetite for lower prices and could trigger a break of support today. The indicators are pointing to a further decline in prices in the near term.
Ldn 2nd Month Cocoa Futures
London cocoa futures buckled yesterday as protracted selling pressure triggered a close at 1791. The stochastics are falling, with %K entering into the oversold territory. The MACD diff is negative, and a break of the support at the 1770 level could trigger losses through 76.4% fib level at 1753, with the tertiary level at 1750. On the upside, a break above 1850 could set the scene for a test of 123.6% fib level of 1866. We believe that the momentum will favour the downside, and after yesterday's long candle body, we expect prices to soften today.