NY 2nd Month Sugar Futures
NY sugar futures softened yesterday after prices failed above the 23.6% fib level of 19.41 once again, prompting a close on the back foot at 19.25. The stochastics are edging towards overbought, with %K/%D seen diverging on the upside, and the MACD diff is positive and also diverging, pointing to further strength in the market. The dips have been poorly bid, and to confirm the full downward candle, the futures need to break below the 40 DMA at 19.20 level before targeting 19.00 and 10 DMA at 18.90, respectively. Alternatively, if prices can gain a footing back above yesterday’s highs at 19.41, the bulls could then target 100 DMA at 19.55 in order to regain upside conviction. We anticipate prices to gain footing before they become overbought, but near term resistance is robust, and futures need to break above it to confirm the appetite.
Ldn 2nd Month Sugar Futures
Lnd sugar futures edged lower yesterday as intraday trading caused it to close at 506.90. The stochastics are diverging on the upside, with %K in the overbought territory, and the MACD is positive and diverging, pointing to a continued buying pressure. The rejection of prices above 510 has formed a candle with a narrow candle body once again, and, at the same time, it has found support at 40 DMA at 503.72, lacking the conviction to break out of these levels. If prices were to break below 40 DMA, this could trigger a test of 100 DMA at 501.35 and then 10 DMA at 498.39. On the upside, futures need to take out 510.70 and then robust resistance at 520. Indicators point to further buying pressure today, but the futures need to take out the near term resistance to confirm this.
NY 2nd Month Coffee Futures
NY coffee edged higher lower as intraday trading caused futures to test appetite at 10 DMA at 239.72, the market closed below at 237.15. Stochastics are falling, and %K/%D is diverging on the downside. The MACD diff is negative and diverging, suggesting growing selling pressure. To confirm a bearish momentum, prices need to close below 230 and then target 40 DMA at 223.24. On the upside, the rejection of resistance at 10 DMA at 239.72 could trigger gains back to 252.35. Selling pressure was weak yesterday; however, indicators point to further growth in the bearish momentum. The doji candle confirms market uncertainty. The reaffirmation of resistance at 10 DMA could strengthen the outlook of lower prices.
Ldn 2nd Month Coffee Futures
Prices strengthened marginally yesterday as moderate buying pressure triggered a close at 2297. The stochastics are rising but show signs of convergence; the %K/%D is about to enter into overbought territory. The MACD is positive and about to converge on the downside, suggesting we could see lower prices in the near term. Whilst prices closed above the 10 DMA at 2288, most of the day's trading took place below this level, and if the futures struggle to maintain prices above the moving average, we could see a change of momentum to a more bearish outlook. If this materialises, futures should first break below the support of 2268, the level the futures struggled to break for most of December, falling down to 40 DMA at 2239. On the upside, a break above 10 DMA could see the test of 2334 level.
NY 2nd Month Cocoa Futures
Prices weakened yesterday as moderate selling pressure triggered a close below the 50% fib resistance level; the market closed at 2504. The stochastics are rising, with %K seen in the overbought territory. MACD is positive and diverging, suggesting further strength in the near term. Monday’s candle was strong, but futures struggled above 50% fib level at 2536 in the last couple of sessions, so in order to confirm the bullish trend, prices need to gain above this level before 100 DMA at 2574. Conversely, a break below the 61.8% fib support level at 2472 could set the scene for a test of 10 DMA at 2464. We expect prices to remain supported above the 10 DMA support level in the near term.
Ldn 2nd Month Cocoa Futures
Ldn cocoa futures edged higher yesterday as trading saw prices close above 1700 at 1706. The stochastics are seen diverging on the upside, with the %K/%D now edging higher towards the overbought territory, and the MACD diff is positive and diverging. A break back below 61.8% fib level at 1691 could trigger losses through 10 DMA at 1685, with the tertiary level at 1650. On the upside, a break above 40 DMA at 1707 could set the scene for bullish momentum towards the 100 DMA of 1756. The spinning top formation has been formed, which points to market indecisiveness, however, a jump above the resistance of 100 DMA would point to an appetite for prices above that level.
