NY 2nd Month Sugar Futures
NY sugar futures failed above 19.44 yesterday as trading caused futures to close at 19.26. The stochastics strengthened, with %K/%D diverging on the upside, and the MACD diff has converged on the upside, a strong buy signal. The rejection of prices at 1376 has formed a candle with a narrow body, suggesting uncertainty about higher prices. If futures were to break above 19.44, this could trigger a test of 40 DMA at 19.61 and then 20.00 – recent highs. On the downside, futures need to take out 23.6% fib level at 19.19 and then robust support at 10 DMA at 19.02. Indicators suggest higher prices but futures need to break above the near term resistance to confirm this.
Ldn 2nd Month Sugar Futures
Prices weakened yesterday as moderate selling pressure triggered a close above the 40 DMA support level; the market closed at 506.60. The stochastics are rising, with the %K/%D diverging, signalling a potential change in trend back to bullish. The MACD is negative and about to converge on the upside. The bearish short-bodied candle points to market uncertainty, however, prices have found support at 40 DMA at 505.84 in the last couple of sessions; in order to confirm the negative momentum, prices need to break below this support and then 10 DMA at 500.55. Conversely, support at 40 DMA could set the scene for a test of 510 and 517.60. We expect prices to strengthen today and remain on the front foot.
NY 2nd Month Coffee Futures
NY coffee weakened yesterday as moderate selling pressure kept the future’s close below 00 DMA level of 205.73; the market closed at 202.70. The stochastics are falling, and %K/%D is trading is diverging on the downside. The MACD is negative and diverging, despite the doji candle formation pointing to market indecisiveness. A break below 200 would confirm a strong bearish momentum, however, prices struggled below this level, and in order to confirm the continuation of lower prices, futures need to break below the current support at 40 DMA at198.24 and then 23.6% fib level at 191.22. Conversely, a break back above the 10 DMA resistance level could set the scene for a test of 209.65. We expect prices to weaken marginally, however, near term support at 200 is likely to hold.
Ldn 2nd Month Coffee Futures
Ldn coffee futures softened marginally yesterday as moderate selling pressures saw futures test appetite at 2173. This level held firm, and the future closed at 2177. The stochastics have converged on the downside, with %K/%D converging on the downside. Likewise, the MACD diff is positive and converging on the downside, signalling growing selling pressures. To confirm the outlook for higher prices, futures need to break above the resistance at 2200, which could set the scene for futures to take out 2279. On the downside, the market needs to take out support at 2173 and then support at 10 DMA at 2160. The 10 DMA level continues to support the futures from the downside, however, seen flattening, and with a longer upper wick on Thursday, we could see the bears’ strength grow in the near term.
NY 2nd Month Cocoa Futures
NY cocoa futures edged lower yesterday after prices failed to break above the 40 DMA at 2662, prompting a close at 2661. The stochastics are rising, with %K seen flattening, and the MACD diff is negative and converging. The indicators point to near term strength before the convergence of positive momentum. To confirm rejection of prices above 40 DMA, futures need to take out support at 2600, a level futures to breach this week, and then target 2557. On the upside, futures need to close above 40 DMA and then test the 23.6% fib level at 2685 in order to confirm the outlook of higher prices towards 2700. We expect futures to strengthen marginally in the near term.
Ldn 2nd Month Cocoa Futures
Ldn cocoa futures softened yesterday after finding support at 1744. The market closed at 1745. The stochastics are falling in the oversold territory, and the MACD diff is negative but failing to point out momentum, suggesting that we could see a reversal of the trend in the near term as investor weakness paused. A break below 100 DMA level at 1732 would bring into play the 61.8% fib level at 1719. On the upside, futures need to gain back above the trend resistance and then 1770 in order to confirm upside momentum. The reaffirmation appetite for higher prices at that level could trigger gains towards the level at 1800. The longer higher wick points to an increased appetite on the upside, but prices need to edge higher to point out a change of trend.
