NY 2nd Month Sugar Futures
NY sugar futures softened yesterday after prices failed above 19.20 once again, prompting a close on the back foot at 19.10. The stochastics have converged on the upside, with %K/%D now seen strengthening, a strong buy signal, and the MACD diff is also diverging on the upside, outlining the growing upside momentum in the market. The dips have been poorly bid, shown by reduced volume in recent trading sessions, and to suggest the strengthening of momentum, the futures would need to break above the 19.20 level before targeting 19.50 and 20.00, respectively. Alternatively, if prices can break below the 10 DMA support at 18.91, the bears could then target 100 DMA at 18.63 in order to regain downside conviction. We anticipate prices to remain on the front foot in the near term.
Ldn 2nd Month Sugar Futures
Ldn sugar futures edged higher yesterday as intraday trading saw prices test resistance 531.50. The market closed at 531. The RSI is falling, but %K/%D is diverging on the downside into the overbought. The MACD diff is positive and diverging, suggesting growing buying pressures. The indicators point to higher prices in the near term, and to confirm the rejection of the resistance, prices need to take out 531.50. Appetite for prices above this level could trigger a test of 540. Alternatively, a break below 10 DMA at 519.10 towards 510.70 would confirm the double top formation and a subsequent bearish momentum. A narrow candle body after a strong upside conviction in recent days signals uncertainty about the outlook for higher prices, and the futures need to take out the 10 DMA to confirm the outlook for falling prices.
NY 2nd Month Coffee Futures
NY coffee futures held their nerve yesterday as marginal upside momentum saw prices close at 224.85. The RSI is rising, and %K and %D is diverging on the upside. The MACD diff just converged on the upside, a strong buy signal. To confirm the indicators, prices need to take out the 23.6% fib level at 227.95. A break above this level towards 100 DMA at 232.28 would confirm the growing bullish momentum. Conversely, an appetite for prices below the 10 DMA at 220.85 could trigger a test of support of 210. A gravestone doji candle shows potential rejection of higher prices and could point to an end of moderate bullish sentiment we have seen in the last couple of sessions. We anticipate prices on the back foot in the near term.
Ldn 2nd Month Coffee Futures
Ldn coffee futures softened marginally yesterday as intraday trading saw futures test appetite at 40 DMA before closing lower at 2170. The stochastics are rising but showing signs of convergence, with %K/%D overbought. Likewise, the MACD diff is diverging but is seeing slowing upside momentum, signalling waning buying pressures. To confirm the outlook for a change of trend, futures need to break back below the support at 23.6% fib level at 2137, which could set the scene for futures to take out the 10 DMA at 2130. On the upside, the market needs to take out resistance at 40 DMA at 2171 and then 100 DMA at 2230. The 10 DMA level continues to support the futures from the downside, however, seen flattening, and with a longer upper wick yesterday, we could see the bears’ strength grow in the near term.
NY 2nd Month Cocoa Futures
NY cocoa futures rallied yesterday as protracted buying pressure triggered a close on the front foot above 2600 at 2614. The RSI is rising, while %K/%D has just converged on the upside and now rising. The MACD diff is negative and converging, confirming rising buying pressures. On the downside, a break below the key trend support level at 2510 could trigger losses back towards 61.8% fib level at 2485, break below 2436 would confirm the outlook of lower prices in the longer term. On the upside, a break above the 40 DMA at 2631 could trigger gains through 2653 towards 2700. Long candle body points to more certainty in the bullish momentum, and a break above 40 DMA would confirm the outlook for higher prices.
Ldn 2nd Month Cocoa Futures
Ldn cocoa strengthened yesterday, as moderate buying pressure triggered a close on the front foot at 1749. The stochastics are rising, with %K/%D see converging on the upside. The MACD diff is negative and converging. Long bullish candle body with short wicks suggests growing buying pressures; this could set the scene for higher prices to break above the resistance at 1750, but prices struggled above that level. This would confirm the trend for rising prices, up to the 50 DMA level at 1762. On the downside, a breach of trend support at 1718 would strengthen the downside momentum. This could also trigger losses towards 1700. Indicators point to higher prices, but prices need to break above near term resistance to confirm this.