NY 2nd Month Sugar Futures
NY sugar futures jumped higher yesterday as trading saw prices close above 10 DMA at 17.89. The stochastics have converged on the upside, with the %K/%D now diverging higher in the neutral territory, and the MACD diff is positive and diverging. A break of the 18.00 could trigger gains through 40 DMA at 18.08, with the tertiary level at 18.17. On the downside, rejection of the upper trend channel could set the scene for a correction back below 10 DMA at 17.74 could set the scene for downside momentum towards the month low of 17.48. Yesterday’s jump above the resistance of 10 DMA points to an appetite for prices above that level, and indicators confirm that we should see further upside momentum in the near term.
Ldn 2nd Month Sugar Futures
Ldn sugar futures jumped higher yesterday as prices closed at 484.40. The indicators favour the upside, with %K/%D converging on the upside, and MACD diff is negative and converging, suggesting growing buying pressures. A break above 484.50 would bring into play the recent resistance level at 40 DMA at 487.64. On the downside, futures need to break below 10 DMA at 487.79 and then target the recent lows of 471.80 in the near term. A short candle body suggests a lack of appetite for prices above 484.50. The jump yesterday, however, shows a break out of recent range, and prices could continue on the upside if they break above the near term resistance.
NY 2nd Month Coffee Futures
NY coffee held the nerve yesterday as intraday trading caused futures to close above 244.75 once again at 247.25. The %K/%D is diverging on the downside towards the oversold area, confirming further downside momentum in the near term. The MACD converged on the downside, confirming the continuation of selling momentum. On the downside, the rejection of prices above 10 DMA at 251.14 could trigger losses back to the 40 DMA level at 239.53. Support at 244.75 has held pretty firm, creating a small descending triangle, reaffirmation of support there could trigger gains to 254. To confirm upside momentum, prices need to close above 10 DMA and then target 254.75. Buying pressure has been weak, with the volume in the lower ranges, but the recent trend has been on the downside and the indicator point to an acceleration of that momentum.
Ldn 2nd Month Coffee Futures
London futures gained ground yesterday as buying pressure prompted a test of 10 and 40 DMA resistance levels once again to close on the front foot at 2260. The stochastics are showing signs of convergence on the upside, and the %K is tailing off near the overbought, suggesting a buy signal in the near term. The MACD diff is positive, however, lacks the conviction to suggest a sentiment. To confirm the bullish candle, futures need to break above the 40 and 10 DMA at 2252 and 2259, respectively, and then target 2279. On the downside, the break below 2210 could set the scene for lower prices towards the support of 2200. However, the market was well supported above that level in recent weeks, and the bullish engulfing pattern suggests a strong buy signal, and we expect prices to firm in the near term.
NY 2nd Month Cocoa Futures
NY cocoa futures surged yesterday as protracted buying pressure prompted a close back above 2620 at 2656. The stochastics are falling, with %K/%D diverging on the downside, and %K is now oversold, and the MACD diff is negative and diverging. The long candle body could set the scene for higher prices, a break of resistance at 2653 could trigger gains towards 2675. However, on the downside, a break below the 38.2% fib level at 2620 could set the scene for lower prices back to 2600. The indicators point to further downside momentum, but futures need to break below the near term support.
Ldn 2nd Month Cocoa Futures
Ldn cocoa futures edged higher yesterday as intraday trading caused futures to test support at 1710 once again and then close at 1724. The stochastics are falling but are showing signs of convergence in the oversold, and the MACD diff is negative and diverging, but that divergence is slowing. In order to confirm the outlook of higher prices, futures need to close back above 50% fib level at 1730 and then target 1750. The 200 DMA capped upside momentum yesterday, and if prices are to rise further, the futures need to break above this level. On the downside, prices need to fall towards 1700 before 1692. We believe that the market may be due to a correction on the upside in the near term; however, a break of near term resistance would help solidify the outlook.