Arabica coffee term September 2022 (KCEU22) continued its upward momentum, increasing by 2.65 cents (+1.18%), closing price at 226.60 cents/lbs.
Arabica coffee prices continue to be supported by strong momentum by both monetary factors and macro information. US consumer confidence increased month-on-month, easing worries about US inflation and predicting that the FED will be softer in upcoming interest rate adjustments. The USD continued to depreciate against a basket of currencies and other risky assets. The Real rose 1.66% against the USD, 1 USD = 5,074 BRL. This rate supports the price increase of Arabica.
The decline in ICE-standard coffee inventories shows no sign of stopping, reaching 571,950 bags on Thursday. The dry weather in coffee growing areas last week was also a focus of the market and also a major factor. The “excuse” helps hedge funds increase their purchases sharply in addition to preparing to move the upcoming term.
According to technical analysis, the MACD shows bullish momentum still with the next resistance at 230.
Breaking that level will open the door for a further rally to the 240 resistance.
Conversely, 210 is an important support level for Arabica prices, a break of which will trigger strong selling by the bears.
However, the price is also approaching the overbought zone, it should be noted that a downward correction of profit-taking may appear in the short term.
HINTS BUY/SELL STRATEGY IN THE Session (refer).
NEW BUYING CL:
- Support zone 1: 221 – 221.5 cents
- Support zone 2: 218-218.5 cents
- Stop Loss: 216 cents
CL SELL DOWN:
- Resistance zone 1: 228.5 – 229 cents
- Resistance zone 2: 231.5-232 cents
- Stop Loss: 236 cents
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