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Non-independent Research Daily Softs Technical Charts

Non-independent Research

Daily Softs Technical Charts

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NY 2nd Month Sugar Futures

NY sugar futures opened lower but managed to close higher day-on-day at 19.90. The stochastics are rising, but %K is seen tailing off on the downside near the overbought, which could suggest a change of momentum in the near term. The MACD diff is positive and diverging, but the momentum is slowing. On the upside, futures need to break above the robust resistance levels of 20.00 and 20.38 to trigger the momentum. Prices would then need to take out the 20.50 level to confirm the longer-term outlook. Conversely, an appetite for prices below 19.75 could trigger a test of support of 19.50 before 40 DMA at 19.40. A dragonfly doji candle shows rejection of higher prices and could point to an end of the bullish sentiment we have seen in the last couple of days. The indicators highlight a similar trend, and subdued volumes point to market uncertainty about higher prices.

Ldn 2nd Month Sugar Futures

Prices weakened yesterday as moderate selling pressure triggered a close below the 540 support level; the market closed at 536.80. The stochastics are rising but showing signs of convergence on the downside. The MACD is positive and diverging but slowing, and the doji candle formation supports a pause in the market before the change of trend. Dips in the market have been well bid in the last couple of sessions, but in order to confirm the trend on the downside, prices need to break below the current support of 530.20 and then 10 DMA at 522.89. Conversely, a break above the 540 resistance could set the scene for a test of 547.90. We expect prices to weaken in the near term, but the support of 40 DMA needs to be broken to confirm the downside momentum.

NY 2nd Month Coffee Futures

NY coffee futures held their nerve yesterday, causing the market to close at 218.80. The stochastics are about to converge on the downside, and the MACD diff is positive and converging, suggesting lower prices in the near term. To confirm the outlook of lower prices, futures need to close back below 10 DMA at 215.79 and then target 212.60. The 10 DMA is closing in and supporting prices on the downside. However, a break above the 221 level could set the scene for trend resistance and 227, the recent highs. The narrow candle body with longer lower wicks points to a lack of appetite on the downside, but the indicators point to a change of momentum on the downside, keeping the descending triangle formation intact.

Ldn 2nd Month Coffee Futures

Ldn coffee edged higher yesterday as intraday trading caused futures to close above 10 DMA once again; the market closed higher at 2080. Stochastics are rising marginally, and %K/%D is moving sideways in recent days. Likewise, the MACD diff is positive and fluctuates, struggling to point out an outlook. To maintain another bullish candle, prices need to close above 2078 and then target 2104. On the downside, the rejection of prices above 2080 could trigger losses down to 2010, but futures need to close below the 10 DMA at 2062 first. Volumes have been subdued as the markets struggled to gain conviction in any particular direction. Additionally, inside bullish candle could point to a continued sideways trend in the near term.

NY 2nd Month Cocoa Futures

NY cocoa futures softened yesterday after piercing the support level of 10 DMA. The market closed lower at 2480. The stochastics are rising, with %K/%D just diverging on the upside, but the MACD diff, however, is positive and converging. The appetite back above 10 DMA at 2481 could set the scene for higher prices back to test 2543, confirming the hammer formation. On the downside, futures need to break below the support of 2436 in order to confirm the bearish trend in the longer term. Indeed, the 10 DMA support level has been robust in the last couple of weeks, but a recent break below this level would suggest growing conviction on the downside in the near term.

Ldn 2nd Month Cocoa Futures

Ldn cocoa futures weakened yesterday as futures tested the trend support and closed at 1766. The stochastics have converged on the downside and now falling towards the oversold. The MACD diff is negative and diverging, pointing to growing selling pressure. A break below the trend support and longer-term DMAs at 1760 would confirm the outlook for lower prices and the three black crows formation, a clear bearish sentiment. This may pave the way for lower prices to 1750. However, support at these levels has been robust, and we would need a strong downside conviction to confirm the downside sentiment. If these levels hold firm, this could trigger upside momentum to 1800 before 1833. Yesterday’s candle body being below Monday's suggests an appetite for lower prices, but the futures need to break below the robust support levels to confirm this.

Contents

Disclaimer

This is a marketing communication. The information in this report is provided solely for informational purposes and should not be regarded as a recommendation to buy, sell or otherwise deal in any particular investment. Please be aware that, where any views have been expressed in this report, the author of this report may have had many, varied views over the past 12 months, including contrary views.

A large number of views are being generated at all times and these may change quickly. Any valuations or underlying assumptions made are solely based upon the author’s market knowledge and experience.

Please contact the author should you require a copy of any previous reports for comparative purposes. Furthermore, the information in this report has not been prepared in accordance with legal requirements designed to promote the independence of investment research. All information in this report is obtained from sources believed to be reliable and we make no representation as to its completeness or accuracy.

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