Arabica coffee term 03/2023 (KCEH23) was mixed with coffee on London floor, reversed to increase and recovered, up 6.60 cents (+3.95%), closing price at 173.55 cents/lbs.
Market overview
The dollar is still volatile as the market is still concerned about the US economy will slow down when the Fed chair has emphasized that the tightening of monetary policy will be prolonged with interest rates ending soon. higher than the market predicted in the previous speech. However, Treasury yields rose and investors expected China’s growth to recover when measures to curb Covid-19 were eased, ending yesterday’s session with the dollar falling slightly.
The DXY Index fell 0.211% to 103,980. Arabica coffee prices benefited from the weakening USD. The Brazilian Real is trading around 1 USD = 5.2681 BRL. This exchange rate has restrained the selling momentum of producers, supporting the recovery of Arabica coffee prices.
Standard inventories of the ICE New York floor continued to increase at 797,755 bags as of December 28. This factor also somewhat restrained the increase in price of Arabica coffee. However, supported by weather information with positive rainfall in Brazil’s coffee growing regions, Arabica prices rose sharply after the holiday.
Technical Trends
According to technical analysis, yesterday’s good bullish candle pulled Arabica price to test MA50 at 173.20. MACD shows bullish momentum signal still present. It is expected that in the short term, Arabica price may increase to detect resistance with the next target at 179-180, on the contrary, 162-164 is the near support area of the price.
HINTS BUY/SELL STRATEGY IN THE Session (refer).
NEW BUYING CL:
- Support zone 1: 168.5 – 169 cents
- Support zone 2: 163 – 163.5 cents
- Stop Loss: 160 cents
CL SELL DOWN:
- Resistance zone 1: 176.5 – 177 cents
- Resistance zone 2: 179.5 – 180 cents
- Stop Loss: 185 cents
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