NY 2nd Month Sugar Futures
NY sugar futures opened lower as they struggled above the 10 DMA level and closed on the back foot at 17.78. The stochastics are falling, with %K/%D seen diverging on the downside into the oversold. The MACD diff has converged on the downside, suggesting a strong sell signal. The rejection of higher prices may prompt a break back towards support at 17.62, a subsequent breach of this level could trigger losses towards 17.48. On the upside, a break of the 10 DMA resistance at 18.09 may prompt futures to test 40 DMA at 18.30. A subsequent breach of this level would prompt prices to regain upside momentum in the near term. Longer upper and lower wicks point to an appetite out of the current trading range; however, the future needs to break above the 10 DMA, a level the futures struggled to break above, to confirm the outlook.
Ldn 2nd Month Sugar Futures
Prices weakened yesterday as moderate selling pressure triggered a close at 516. The stochastics are falling; the %K/%D is diverging towards the oversold, signalling a continuation of a bearish trend. The MACD diff is positive and converging, suggesting we could see lower prices in the near term. Prices tested 10 DMA at 521.47 once again, however, a close below and a long lower wick support market indecisiveness above that level. On the upside, a break above 10 DMA could see the test of 100 DMA level at 528. Conversely, a break below the 512.90 support line could set the scene for a test of 500. We expect prices to soften today and remain on the back foot.
NY 2nd Month Coffee Futures
NY coffee futures failed above 230 yesterday as intraday trading caused futures to close at 239.50. The stochastics are rising in the overbought but seen converging on the downside, and the MACD diff is still positive and diverging, suggesting the upside momentum is yet to reach the peak. The rejection of prices at 230 has formed a candle with a narrow body but a long wick on the upside, suggesting an appetite for higher prices, however, lacking the conviction to break above the near-term resistance. If prices were to break above this level, this could trigger a test of 244,75 and then 250 – February highs. To confirm the shooting start formation, futures need to take out 230 and then robust support at 10 DMA at 222.78. A break below this level would confirm the outlook for lower prices.
Ldn 2nd Month Coffee Futures
Lnd coffee prices declined yesterday after prices rejected resistance at 2355. The market closed at 2312. The stochastics continue to weaken, with %K/%D diverging out of the overbought and MACD diff is positive and now converging, suggesting we could see lower prices in the near term. A break below 2300 could set the scene for a test of support at 2281. On the upside, if support at 2300 holds firm could set the scene for higher prices through 2355 once again. Secondary resistance stands at the 2400 level, which would help to confirm the ascending triangle. We expect prices to edge lower in the near term.
NY 2nd Month Cocoa Futures
NY cocoa futures edged higher yesterday as intraday trading caused futures to test appetite at 2420 once again and then close at 2417. The stochastics are improving, and the MACD diff is negative and converging. In order to confirm the outlook of higher prices, futures need to close back above 2420 and then target the trend resistance at 2438. On the downside, if prices fail above 2400, this could trigger losses towards 10 and 40 DMA at 2387 and 2371, respectively, in the medium term. We believe that the market may be due a correction on the upside in the near term; however, a break of near-term resistance would help solidify the outlook.
Ldn 2nd Month Cocoa Futures
Ldn cocoa futures strengthened marginally yesterday, but resistance at 1837 triggered a close below at 1835. The RSI is falling, while %K/%D converged on the upside and now diverging back towards the overbought. Likewise, the MACD diff is positive and diverging, which signals further upside momentum in the near term. On the upside, finding support above 1817 could trigger gains through 1837, the recent highs, towards 1850. On the downside, a break below the trend support level could trigger losses back towards 1800. That level has been supporting futures prices, and a break below it would signal strong selling pressure. Longer wicks signal that the buying pressure is waning as the candle struggled above the near-term resistance once again, suggesting we could see capped upside moves in the near term.