NY 2nd Month Sugar Futures
NY sugar futures market failed above the upper trend channel, and was bid at support so consolidated during the day. The RSI is falling, and %K/%D is showing signs of convergence on the downside near the overbought territory. The MACD diff is positive and diverging. The indicators point to lower prices in the near term, and to confirm the rejection of the support, prices need to take out 18.40. A break below this level towards 18.17 would confirm the rejection of the upper trend channel and shooting star. Conversely, appetite for prices above the 40 DMA level at 18.60 could trigger a test of trend resistance; currently, at 18.70, tertiary resistance stands at 19.00. A spinning top candle after a bearish candle signals uncertainty about the outlook for trend reversal, but a break below the near term support would confirm there is more appetite on the downside.
Ldn 2nd Month Sugar Futures
Ldn sugar futures held their nerve on Friday, causing the market to close at 497.50. The stochastics are converging in the overbought, and the MACD diff is positive and converging, pointing to waning buying pressures. To confirm the outlook of lower prices, futures need to close back below the 40 DMA at 494.48 and then target 490. The 10 DMA is closing in and supporting prices, however, futures need to gain a footing above 500 and break above 100 DMA level at 501.98 to confirm the reaffirmation of support at the 40 DMA. A narrow candle body with a long upper wick points to a potential change in trend in the near term, and if the futures break below the 40 and 10 DMAs, this would confirm the further bearish momentum.
NY 2nd Month Coffee Futures
NY coffee softened on Friday, as protracted selling pressure triggered a breakthrough of 10 DMA and closed on the back foot at 238.10. The stochastics are falling, with %K/%D diverging on the downside in having broken below overbought, a strong sell signal. The MACD diff is positive and converging, suggesting increasing downside pressures; this could set the scene for lower prices towards the 40 DMA support level at 235.63. A break below this would confirm the trend for falling prices, down to 229.65. On the upside, resistance at 244.75 has proven to be strong before, and appetite above that level would strengthen the bullish momentum. This could also trigger gains towards 252.35. Long candle body along with a longer lower wick point to an increased appetite on the downside; however, the futures need to break completely below 40 DMA to confirm the outlook.
Ldn 2nd Month Coffee Futures
Ldn coffee futures edged lower on Friday but struggled below 2210 once again, causing the market to close at 2213. The stochastics are rising, with %K/%D converging on the upside in the oversold, a strong buy signal, and the MACD diff is negative and converging, suggesting higher prices in the near term. To confirm the outlook of higher prices, futures need to close above 10 DMA at 2235, then target 2279. The 10 and 40 DMAs are closing in and capping prices on the upside. However, a break below 100 DMA at 2210, the support level the prices struggled to break last week, could set the scene for 2173. The narrow candle body with a longer lower wick alongside bullish indicators points to market uncertainty about lower prices, and the futures should gain footing in the near term.
NY 2nd Month Cocoa Futures
NY cocoa futures softened on Friday but found support above the 10 DMA. The market closed at 2629. The stochastics are beginning to soften, with %K/%D converging on the downside in the overbought territory, and the MACD diff is positive and converging, suggesting we could see lower prices in the near term through the support of 2600, which could set the scene for support at 2567. On the upside, futures need to gain back above 2675 in order to confirm upside momentum. The reaffirmation of support could trigger gains towards the level at 2700; this could strengthen the trend in the longer run on the upside. Short upper wick and a long body, where most of the trading took place in the lower ranges, points to strengthening appetite on the downside, however, futures need to break below 10 DMA to confirm this.
Ldn 2nd Month Cocoa Futures
Lnd cocoa futures sold off on Friday after prices failed above 1795, prompting a close on the back foot at 1773. The stochastics are sending strong sell signals, with %/%D converging on the downside, and the MACD diff is also converging on the downside, outlining the upcoming weakness in the market. Selling pressure has been strong, and Friday’s close on the low suggests lower prices towards 1750, but first, futures need to take out 61.8% fib level at 1767. Alternatively, if prices can gain a footing back above 1800, the bulls could then target a 76.4% fib level at 1813 in order to regain upside conviction. We anticipate prices to remain on the back foot in the near term.
