Arabica coffee term December 2022 (KCEZ22) is still sold out mercilessly, decreasing 2.80 cents (-1.44%), the price closed the old session at 192.30 cents/lbs.
The negative trend of coffee prices on both bourses continued in the context of the unstable world economic situation due to inflation, interest rates of G7 currencies continuously increasing, causing borrowing costs to expand production and business. Increased sales in the demand for goods and coffee in particular were affected by inflation. The dollar yesterday increased by 0.73% to 112.76, making commodity prices all red. The Brazilian Real is currently trading around 1 USD = 5.2700 BRL.
There is still favorable wind and rainy weather in Brazil promising a high-yield crop year, which will continue to affect prices, in addition to the fact that inventories of ICE-standard coffee are continuously decreasing, but coffee is available in other countries. Consumption is still very abundant, putting more pressure on coffee prices on both floors in general and Arabica in general.
According to technical analysis, Arabica price has dropped to its lowest level since September 2021. RSI is deeply in oversold territory of 26.97%. All technical indicators are showing signs of bearish momentum. It is expected that in the short term, the price may continue to drop to the support zone of 185-187. However, it is not possible to rule out the possibility that a technical recovery will soon occur because the price has entered the oversold area.
Overview of the Arabica coffee market (October 19, 2022)
HINTS BUY/SELL STRATEGY IN THE Session (refer).
NEW BUYING CL:
- Support zone 1: 189 – 189.5 cents
- Support zone 2: 186.5 – 187 cents
- Stop Loss: 183 cents
CL SELL DOWN:
- Resistance zone 1: 195.5 – 196 cents
- Resistance zone 2: 199.5-200 cents
- Stop Loss: 205 cents
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