Arabica coffee term September 2022 (KCEU22) continued to decline, down 3.3 cents (-1.55%), closing price at 209.90 cents/lbs.
Concerns about inflation, the Fed’s interest rate hike policy temporarily subsided because the whole market is currently observing the visit to Taiwan of the US House of Representatives Speaker, an activity that may cause political tension between the US and China which has been a major concern. already instability could escalate. Speculative cash flows frantically seek refuge in safe assets such as gold and JPY. USD appreciated, other risk assets including coffee fell. The Real fell slightly against the USD, 1 USD = 5.27-5.28 BRL. When the real weakens, it can trigger a strong selling force of farmers. In addition, Arabica continued its decline partly because of the futures movement of speculators.
Currently, all information from monetary factors to abundant supply, and the fear of inflation reducing consumption demand are having a negative impact on Arabica coffee prices. The market continues to observe the latest changes from the Brazilian weather to wait for the frost information to be able to save coffee prices.
According to technical analysis, the price of Arabica yesterday sometimes touched the lowest level of 206, which means the support area at 210 has been breached, this is a pretty bad signal for Arabica coffee prices. The technical signals are neutral, it is expected that in the short term, the price will struggle in the range of 200 – 225 and may drop to support the psychological resistance level of 200. On the contrary, the price of Arabica needs to overcome the frame 220- 230 is enough to attract buyers to find a new resistance area.
HINTS BUY/SELL STRATEGY IN THE Session (refer).
NEW BUYING CL:
- Support zone 1: 206 – 206.5 cents
- Support zone 2: 202-202.5 cents
- Stop Loss: 198 cents
CL SELL DOWN:
- Resistance zone 1: 216 – 216.5 cents
- Resistance zone 2: 220-220.5 cents
- Stop Loss: 225 cents
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