Arabica coffee term September 2022 (KCEU22) reversed to recover, up 2.40 cents (+1.15 percent), closing price at 211.85 cents/lbs.
The price of Arabica coffee yesterday was supported by both monetary factors and macro information on supply and demand and weather. The USD had a downward correction in the context of the market waiting for US CPI data to be released tomorrow to assess US inflation as well as predict the upcoming Fed interest rate policy. The Real rallied against the USD, 1 USD = 5.1130 BRL. This rate supports the price increase of Arabica.
Inventories of ICE-qualified coffee continued to decline, reaching 630,304 bags on Monday. In addition, according to Somar Met, the whole week before Brazil’s main Arabica growing region, Minas Gerais, did not receive any rain, raising concerns about drought leads to frost. The market is continuing to closely observe the Brazilian weather situation at this stage.
According to technical analysis, MACD and RSI both give bullish signal. However, with a strong fluctuation range during the session, it is necessary to wait for Arabica to adjust to good support levels to buy into the state, avoiding buying chasing the price. It is expected that Arabica price will continue to struggle in the range of 200-230 with the buying force still dominating.
HINTS BUY/SELL STRATEGY IN THE Session (refer).
NEW BUYING CL:
- Support zone 1: 207 – 207.5 cents
- Support zone 2: 203.5-204 cents
- Stop Loss: 198 cents
CL SELL DOWN:
- Resistance zone 1: 218 – 218.5 cents
- Resistance zone 2: 224-224.5 cents
- Stop Loss: 228 cents
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