Arabica coffee for September 2022 (KCEU22) continued its upward momentum thanks to both monetary factors and fundamental information, gaining 5.90 cents (+2.77%), closing price at 219.10 cents/lbs.
The USD index fell 0.756% to 106.31 yesterday when the Fed raised interest rates by 0.75% as the market expected and Chairman Powell said about reducing the rate of interest rate increase in the near future if the health indicators The improved US economic health proves that monetary policy is effective. The Real continued to appreciate against the USD, 1 USD = 5.24-5.25 BRL. This exchange rate restrained the selling momentum of coffee producers and supported the increase in Arabica prices.
Inventories of ICE-standard coffee continuously set new lows, currently only 700.33 thousand bags. In addition, the forecast information about a cold front in the Arabica growing area also supports the price increase of Arabica. However, frost is only a forecast, both farmers and investors are still observing more about the Brazilian weather situation.
According to technical analysis, the MACD is converging upwards and the RSI is still at the average level, so the signal that the bullish momentum of the Arabica coffee price is still there. It is expected that the price will increase to detect short-term resistance at 225-228 and meet technical selling in that area. If the end of the weekly candle, the price can maintain above the resistance area, it is a bright signal for Arabica, otherwise 210-212 is the close support area of the price. Any downward correction is also an opportunity for customers to exit the selling position at the previous unfavorable low price area.
HINTS BUY/SELL STRATEGY IN THE Session (refer).
NEW BUYING CL:
- Support zone 1: 214 – 214.5 cents
- Support zone 2: 210-210.5 cents
- Stop Loss: 206 cents
CL SELL DOWN:
- Resistance zone 1: 222 – 222.5 cents
- Resistance zone 2: 228-228.5 cents
- Stop Loss: 232 cents
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