Arabica coffee term December 2022 (KCEZ22) reversed and dropped sharply before the Fed announced interest rates, down 3.85 cents (-1.71%), closing price of the old session at 221.30 cents/lbs.
The USD continued to attract speculative cash flows and rose to the strongest level in the past 2 decades at 111.63. Coffee prices on both exchanges adjusted down due to the strength of the USD and closed the session before the news that the FED officially raised interest rates by 0.75% as the market expected to be announced. The Real decreased slightly by 0.36% against the USD, 1 USD = 5.1720 BRL.
New York-standard coffee inventories continued to decline and hit a 23-year low at 515,064 bags as of September 20. However, this information is not very supportive for Arabica prices when Brazil has completed 99.4% of the harvest of this year, ready to launch sales, increasing supply to the market. This news put downward pressure on Arabica prices.
According to technical analysis, the technical indicators are showing neutral signal. It is expected that in the short term, the price is still struggling in the old range of 215-235. However, it is not excluded that at the opening session of today, Arabica prices may correct down because the information of the Fed raising interest rates last night was announced after the New York coffee floor closed. The near support is at 215-218, whereas the close resistance is at 232-235.
HINTS BUY/SELL STRATEGY IN THE Session (refer).
NEW BUYING CL:
- Support zone 1: 218 – 218.5 cents
- Support zone 2: 215-215.5 cents
- Stop Loss: 211 cents
CL SELL DOWN:
- Resistance zone 1: 225 – 225.5 cents
- Resistance zone 2: 229.5-230 cents
- Stop Loss: 235 cents
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