NY 2nd Month Sugar Futures
NY sugar futures edged lower yesterday after prices broke below the 18.11 support, prompting a close at 17.92. The stochastics are falling, with %K/%D diverging on the downside, and the MACD diff is negative and diverging, confirming the outlook on the downside. To confirm the bearish indicators and rejection of prices above 18.11, the next key level to watch out for today is at 17.91 and then 17.29. On the upside, futures need to close above the 38.2% fib at 18.11 and then test 10 DMA at 18.53 in order to confirm the outlook of higher prices. A long candle body with a short upper wick indicates bears found support at 17.91. And while the stochastics are diverging on the downside, the %K is in the oversold, so we would expect to see a trend reversal in the near term.
Ldn 2nd Month Sugar Futures
Ldn sugar futures softened marginally yesterday, and we saw futures test appetite at 480. This level held firm, and the future closed at 480.50. The stochastics are falling, with %K/%D diverging on the downside and %K entering the oversold. Likewise, the MACD diff is negative and diverging, signalling growing selling pressures. To confirm the outlook for lower prices, futures need to break below the support at 480, the lows not broken below since July. Taking out this level could trigger a breach of support at 477 before 471.80. On the upside, if the futures are to confirm a trend reversal, prices need to take out the previous day’s highs at 488.90 before 10 DMA at 492.51. In line with NY sugar, the candle’s long upper wick is indicative of markets finding firm support of 480 yesterday, and if this level holds, we expect to see a trend reversal in the near term.
NY 2nd Month Coffee Futures
NY coffee strengthened yesterday but struggled to break above 40 DMA once again, closing below at 231.85. The stochastics are rising, with %K/%D is seen diverging on the upside. The MACD diff is negative and converging, pointing to rising buying momentum. A bullish candle with a longer lower wick suggests growing buying pressures; this could set the scene for higher prices to break above the 40 DMA resistance at 232.35. This would confirm the trend for rising prices, up to 240. Likewise, on the downside, the 10 DMA provided support at 228.64 yesterday, and a break below this level could trigger losses to trend support, currently at 225.86. If this level fails, then we would be looking for a start of a possible downtrend, down to 220 and below. The indicators are pointing to further price strengthening in the near term, but 40 DMA resistance has proven to be robust in recent days, and longer lower wick after a doji candle points to a lack of appetite above these levels.
Ldn 2nd Month Coffee Futures
Prices weakened yesterday as moderate selling pressure triggered a close below the 2325 level; the market closed at 2307. The stochastics are falling, signalling a continuation in a bearish trend. The MACD is also negative and diverging. A break below 10 DMA and now 2325 is highlighting growing bearish momentum but to confirm the change of trend, futures need to break below the support of 40 DMA at 2290. A break below this level would threaten the strong positive trend that had spent much of last year’s building. If, however, 40 DMA holds firm, the futures need to take out 10 DMA at 2347 and back above this level to confirm the continuation of a long-term positive trend. A break below 40 DMA could be a potential signal of a start of a bearish trend.
NY 2nd Month Cocoa Futures
NY cocoa futures weakened yesterday as futures broke below support at 40 and 200 DMAs at 2503 and closed at 2466. The stochastics continue to fall as they edge towards oversold, and the MACD diff just converged on the downside, a strong sell signal. A complete break below 61.8% fib level at 2475 would trigger losses to 2436, and the market’s reaction to this support level could determine the direction of the market. Conversely, the reaffirmation of support above 2475 would suggest higher prices and a close back above the 40 and 200 moving averages. Selling pressure is moderate, but indicators point to an acceleration of that momentum in the near term.
Ldn 2nd Month Cocoa Futures
Lnd cocoa prices declined yesterday after rejecting resistance at 1700. The market closed at 1680. The stochastics continue to weaken, and the recent decline has brought the stochastics near the oversold, and MACD diff is negative and diverging, suggesting we could see lower prices in the near term. A break below the 38.2% fib level at 1662 could set the scene for a test of support at 1650. On the upside, a break above 50 and 200 DMA levels at 1703 could set the scene for higher prices through 1719. Three black crows pattern formation confirms indicators’ outlook for lower prices in the near term.
