NY 2nd Month Sugar Futures
NY sugar futures edged lower yesterday as moderate selling pressure triggered a close at 18.80. The stochastics are diverging on the downside, in the oversold territory, and the MACD diff is negative and diverging, accounting for the previous sell-off. A break of 18.80 completely could trigger losses through 18.44, with the tertiary level at 18.17. On the upside, a break above previous sessions’ highs and 100 DMA at 18.94 could set the scene for a test of 19.17, pointing to a change of trend back for more bullish momentum. Yesterday’s spinning top formation points to market indecisiveness about the outlook for lower prices, and with the indicators oversold, we expect the downtrend to stall in the near term.
Ldn 2nd Month Sugar Futures
Ldn sugar futures held their nerve yesterday as intraday trading saw prices close at 540.40. The RSI is rising, whereas %K/%D is negative and diverging on the downside, with %K now oversold. The MACD diff is negative and diverging, suggesting further selling pressure before a trend change. To confirm the outlook for higher prices, futures need to take out the 540.47 level. A break above this level towards the 10 DMA level at 548.38 would confirm the strong bullish momentum. Conversely, an appetite for prices below the 40 DMA at 533.02 could trigger a test of support of 530.20. A positive narrow-bodied candle after a similar bearish candle signals market uncertainty, and narrowing support and resistance DMAs are creating a tight trading range, a break out of which would set the scene for strong momentum. We anticipate prices on the back foot in the near term, however, futures need to break below 40 DMA to confirm the momentum.
NY 2nd Month Coffee Futures
NY coffee futures held their nerve yesterday, causing the market to close at 226.90. The stochastics are falling, but %K is showing signs of tailing off, and the MACD diff is negative and diverging, suggesting lower prices in the near term. To confirm the outlook of lower prices, futures need to close below 100 DMA at 228.72 and then target 212.60, the recent lows. The 10 DMA at 232.62 is closing in and providing resistance for prices. However, a break above that level could set the scene for 240 and then 1244.75. The narrow candle body with a long upper wick following a similar bearish candle points to market uncertainty about the direction of the move, and the futures need to break out of current resistance/support to confirm the near-term outlook.
Ldn 2nd Month Coffee Futures
Ldn coffee futures weakened marginally yesterday after testing the support level of 2046. The market closed lower day on day at 2053. The stochastics are falling, with %K/%D diverging on the downside. Likewise, the MACD diff just converged on the downside and is now falling, pointing to a strong sell signal across the indicators. To confirm this, futures need to break below the support of 2032, down to 2010. The DMA resistance levels have been robust in the last couple of sessions, and a break above these levels could suggest growing conviction on the upside. On the upside, reaffirmation of support at 2040 could set the scene for higher prices back to breach the 40 DMA level at 2086 up to 2100, confirming an inverse hammer formation. The indicators confirm growing selling pressures in the near term, and if the support at 2010 is broken, this could suggest a longer term trend on the downside.
NY 2nd Month Cocoa Futures
NY cocoa futures softened marginally yesterday as moderate selling pressures saw futures test appetite at 2355. This level held firm, and the future closed at 2367. The stochastics are diverging on the downside, %K now oversold. Likewise, the MACD diff is negative and diverging on the downside, signalling growing selling pressures. To confirm the outlook for lower prices, futures need to break below the support at 2333, which could set the scene for futures to take out 2317. On the upside, the market needs to take out resistance at 2420 and then 10 DMA at 2473. With the shorter candle body after a strong sell-off and oversold indicators, we would expect a change of trend in the near term.
Ldn 2nd Month Cocoa Futures
Prices gained ground yesterday as support held strong, causing prices to close marginally higher at 1739. The MACD diff is negative and diverging. The stochastics are also falling on the downside. Indeed, the inside day yesterday suggests a continuation of the recent trend on the downside and an attempt to break below the support at 1730. If this level is broken, prices could target 1705. On the upside, a rise above the 1750 level could trigger gains to 100 DMA at 1769. The indicators point to continuing downside momentum, but candles need to break below the near-term support of 1730 to confirm this.