NY 2nd Month Sugar Futures
NY sugar futures gained ground yesterday as protracted buying pressure prompted a test of 19.86 to close on the front foot at 19.81. The stochastics are falling, and the %K is seen edging down towards the oversold, highlighting the persistent selling pressures. The MACD diff is negative and diverging. To confirm another bullish candle, futures need to close above 10 DMA at 19.96 and then target the trend line at 20.10. On the downside, a complete break below 19.50 could set the scene for lower prices towards the support of 40 DMA at 19.23. The market struggled above the 10 DMA level in recent sessions and the indicators point towards further downside momentum in the near term.
Ldn 2nd Month Sugar Futures
Ldn sugar futures surged yesterday as protracted buying pressure prompted a close back above 531.50 at 535.80. The stochastics are falling, with %K/%D diverging on the downside, and the MACD diff is negative and diverging. The bullish engulfing candle could set the scene for higher prices, a break of resistance at 540 could trigger gains towards 10 DMA at 542.32. However, prices have failed at 547.90 in recent weeks, and this could set the scene for lower prices back to the 40 DMA level at 525.32 and then 520. We expect prices to remain supported above 531.50 but struggle to gain footing in the near term.
NY 2nd Month Coffee Futures
Prices rallied as protracted buying pressure triggered a close above the 10 and 40 DMA levels; the market closed at 228.10. The stochastics are falling but about to converge on the upside, and the MACD diff is negative and converging, suggesting waning selling momentum. In order to confirm the outlook for higher prices, futures need to break above the current resistance of 23.6% fib level at 227.95 and then 100 DMA at 233.40. Conversely, a break below the 221 support line could set the scene for a test of 212.60. The long candle body following the marginal downside appetite in recent days could be a sign of a change of trend, but futures need to confirm this by edging higher in the near term.
Ldn 2nd Month Coffee Futures
Prices held their nerve yesterday as moderate buying pressure triggered a close below the 40 DMA level; the market closed at 2114. The stochastics are rising. The MACD diff has just converged on the upside, a strong buy signal. The futures have been trading in a narrow range bound by the support and resistance of 2078 and 40 DMA, respectively; in order to confirm the positive momentum, prices need to break above the current resistance at 40 DMA at 2214 and then target the trend resistance at 2134. Conversely, support at 2078 has been robust, and a break below this level could set the scene for a test of 2019. We expect prices to continue to gain footing in the near term, as the futures attempt to break above the 40 DMA resistance.
NY 2nd Month Cocoa Futures
NY cocoa softened yesterday as moderate selling pressure triggered a close on the back foot at 2592. The stochastics are falling, but %K is seen tailing off on the upside near the oversold territory, highlighting the possible waning selling pressures. The MACD diff is negative and flat, suggesting stalling downside impetus; this could set the scene for higher prices towards the 40 DMA level at 2609. A break above this would confirm the trend for rising prices, up to 10 DMA at 2621. On the downside, a support of 200 DMA at 2577 has proven to be strong before, and a break below that level would strengthen the bearish momentum. This could also trigger losses towards 2553. Narrow candle body along with a longer lower wick point to a lack of appetite on the downside.
Ldn 2nd Month Cocoa Futures
Ldn cocoa futures opened higher day-on-day and gained marginal ground to close at 1788. The stochastics are falling, but %K is seen tailing off and could be a signal of upside convergence. The MACD diff, however, is negative and diverging, suggesting a strong appetite for lower prices in the near term, but futures need to break below the robust trend support level at 1774 to trigger the momentum. Prices would then need to take out the 1750 level. Conversely, an appetite for prices above 1800 could trigger a test of resistance of 76.4% fib level at 1813. A dragonfly doji candle shows rejection of higher prices and could point to a continuation of the downside momentum we saw last week. The indicators being negative could also confirm the continuation of that momentum in the near term.