NY 2nd Month Sugar Futures
NY sugar futures rallied yesterday as protracted buying pressure prompted a test of the 18.17 level to close at 18.12. The stochastics have converged on the upside, highlighting growing buying pressures. The MACD diff is positive and diverging. To confirm another bullish candle, futures need to close above 18.17 and then target the 18.57. On the downside, the break below 17.49 could set the scene for lower prices towards the support of 17.29. However, the market struggled below that level in recent weeks, and the bullish engulfing pattern suggests a strong buy signal. We believe that prices will strengthen in the near term, however, the futures need to break above 18.17 to confirm that.
Ldn 2nd Month Sugar Futures
London sugar futures jumped higher yesterday as trading saw prices close above 10 and 40 DMAs at 496.40. The stochastics are seen diverging 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 100 DMA at 496.08 could trigger gains through 500, with the tertiary level at trend resistance at 502.73. On the downside, a break below 484.50 could set the scene for bearish momentum towards the robust support of 10 DMA at 483.06. The long candle and a jump above the DMA levels point to an appetite for higher prices; a jump above the resistance of 100 DMA is needed to confirm appetite for prices above that level.
NY 2nd Month Coffee Futures
NY coffee futures edged higher yesterday as the futures closed at 236. The RSI is rising, and stochastics are falling in the oversold, but %K is seen tailing off. The MACD diff is negative and diverging, but the momentum is slowing, suggesting slowing selling pressure. The indicators point to slowing downside momentum, but to confirm the rejection of the resistance, prices need to take out 240. A break above this level towards 10 DMA at 244.13 would confirm the growing upside momentum. Conversely, an appetite for prices below the 10 DMA at 230.75 could trigger a test of 23.6% fib level at 227.95. A bullish candle with a small candle body after a strong selling pressure suggests a lack of appetite for a change of momentum, and the futures need to break back above the trend resistance to confirm the continuation of ascending triangle.
Ldn 2nd Month Coffee Futures
Ldn coffee futures held failed into resistance at 2137 but was supported below 2080 and closed higher at 2084. The stochastics are falling, with %K/%D just diverging on the downside in the oversold and is not showing any signs of convergence as of yet, and the MACD diff is negative and diverging, suggesting further downside momentum. Alternatively, the reaffirmation of support at 23.6% fib level at 2137 could set the scene for higher prices back to test 2173, confirming an inverse hammer formation.
NY 2nd Month Cocoa Futures
NY cocoa futures opened lower day-on-day but gained marginal ground to close at 2521. The %K/%D are oversold but seen converging, which could be a signal for a change of momentum. The MACD diff is negative and diverging, suggesting a further appetite for lower prices, but futures need to break below the psychological levels of 2500 to trigger the momentum. Prices would then need to take out the 61.8% fib level at 2485. A break below this level towards 2436 would confirm the strong bearish momentum. Conversely, an appetite for prices above the 200 DMA at 2542 could trigger a test of resistance of 2567. A dragonfly doji candle shows rejection of lower prices and could point to an end of the bearish sentiment we have seen in the last couple of weeks. The volumes were large yesterday. We anticipate a change of momentum in the near term.
Ldn 2nd Month Cocoa Futures
Ldn cocoa futures softened yesterday after breaking support of 1700. The market closed at 1683. The stochastics are oversold but showing signs of convergence, and the MACD diff is negative and diverging, suggesting we could see a change of momentum, but prices need to break above 1700. A break above this level would bring into play the 50% fib level at the 1730 level. On the downside, futures need to break below 1650– the previous months’ lows - in order to confirm downside momentum. The long lower wick points to a slowing appetite on the downside, but prices need to confirm the change in momentum through 1700 in the near term.
