Arabica coffee term 12/2022 (KCEZ22) was mixed with coffee on the London floor, up 6.30 cents (+2.84%), closing price of the old session at 228.50 cents/lbs.
The USD had a downward correction to a 1-week low against a basket of currencies and commodities when the market thought that a 0.75% interest rate increase at the Fed’s meeting next week was almost certain. US stocks and gold also rallied before the weakening of the dollar. The real is up 1.15% and is currently trading around 1 USD = 5.1470 BRL. This exchange rate restrains the strong selling momentum of producers, supporting the uptrend of Arabica prices.
In addition to being supported by the monetary factor, the price increase of Arabica coffee is also supported by weather information when the market is concerned about the ongoing drought and water shortage in key coffee growing areas of the country. Brazil, raising concerns about the impact on coffee production next season. .
According to technical analysis, all technical indicators are showing neutral signals.
It is expected that before new news about US CPI and new interest rate hike of the Fed, prices will struggle sideways in the short term with a range of 215 – 235.
The upward correction of Arabica coffee supported by weather information is an opportunity for you to reduce your unfavorable buying position at high prices. Because when the Brazilian weather appears rainy, the weather pressure and the crop is immediately relieved, which can lead to a decrease in Arabica.
HINTS BUY/SELL STRATEGY IN THE Session (refer).
NEW BUYING CL:
- Support zone 1: 224.5 – 225 cents
- Support zone 2: 221.5-222 cents
- Stop Loss: 218 cents
CL SELL DOWN:
- Resistance zone 1: 231.5 – 232 cents
- Resistance zone 2: 233.5-234 cents
- Stop loss: 238 cents
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