Arabica coffee term 03/2023 (KCEH23) ended the first session of the year slightly down, down 1.00 cents (-0.60%), closing price at 166.30 cents/lbs.
The USD ended the session strongly with a strong gain in the context of the US market trading again after the New Year holiday. The market is still watching the information on the minutes of the December 2022 meeting and the much-anticipated December Employment Report due to be released this week in order to be able to predict the next actions of the Fed on the future. interest rate hikes take place in the new year. Although Arabica coffee price increased in the session, it was influenced by the strong increase in the USD price, leading to a slight decrease in the end of the session. The Brazilian Real appreciated at 1 USD = 5.4799 BRL. This exchange rate is attractive enough to stimulate Arabica producers to boost sales even more, putting pressure on the recovery momentum of Arabica coffee prices.
Standard inventories of the New York ICE floor continued to increase at 814,686 bags as of December 30, 2022. Besides, the weather situation in Brazil with good rainfall has put downward pressure on Arabica coffee prices.
According to technical analysis, the RSI is moving towards the average level of 47.56% while the MACD is about to converge, so in general, the price trend has neutral and unclear signals. It is expected that in the short term, Arabica price may continue to struggle in the range of 160 – 175. Arabica price is still stuck and blocked by MA50 at 172-173 price range. In addition to the currency factor and the strength of the USD, it is necessary to add more macro information to support Arabica coffee to escape the downward pressure and increase the recovery.
HINTS BUY/SELL STRATEGY IN THE Session (refer).
NEW BUYING CL:
- Support zone 1: 163.5 – 164 cents
- Support zone 2: 160.5 – 161 cents
- Stop Loss: 157 cents
CL SELL DOWN:
- Resistance zone 1: 170 – 170.5 cents
- Resistance zone 2: 173.5 – 174 cents
- Stop Loss: 176.5 cents
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