Arabica coffee term 03/2023 (KCEH23), reversed to increase, increased 3.50 cents (+2.13%), the price closed at 167.80 cents/lbs.
Ending the session yesterday, the dollar fell sharply because the rate of inflation in the US has weakened, leading to investors’ increased risk-taking sentiment. The market bets that the Fed can maintain a 0.5% rate hike like last December’s meeting for the beginning of next year or maybe only 0.25%. This could weaken the USD’s speculative safe-haven function and inflows into other risky assets. The Brazilian Real is up 1.75% at $1 = 5.2090 BRL. This exchange rate restrains the selling momentum of producers, helping to support the price of Arabica coffee to increase.
Inventories of coffee meeting ICE New York standards recorded as of December 20 increased 11,602 to 765,583 bags and nearly 300,000 bags are waiting for classification. This factor has had a negative impact on the price of Arabica coffee.
According to technical analysis, the RSI is at the average level of 51.99%, the MACD shows a bullish signal that the price still has momentum. It is expected that in the short term, Arabica price may increase to detect resistance with the near-term target at the psychological resistance level of 170 and MA50 from 174 to 175, on the contrary, 160-162 is the near support area of the price.
HINTS BUY/SELL STRATEGY IN THE Session (refer).
NEW BUYING CL:
- Support zone 1: 164.5 – 165 cents
- Support zone 2: 161.5 – 162 cents
- Stop Loss: 160 cents
CL SELL DOWN:
- Resistance zone 1: 170 – 170.5 cents
- Resistance zone 2: 172.5 – 173 cents
- Stop Loss: 175.5 cents
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