Overview of the Arabica coffee market (January 12, 2023)

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Arabica coffee term 03/2023 (KCEH23) continued the series of consecutive days of decline, down 7.00 cents (-4.64%), closing price at 143.90 cents/lbs.

The USD traded in a low state as Fed Chairman Jerome Powell did not give any clues about the Fed’s monetary policy during the group discussion in Sweden the previous day and with the Other Fed officials have made it clear their next moves will depend on economic data so investors are focusing on today’s US CPI data, with expectations will see more clearly the picture of US interest rates. The DXY index ended the session down 0.68% to 103.18. The Brazilian Real fell at 1 USD = 5.1602 BRL. The decrease in the value of the local currency is also a factor that restrains the price of Arabica coffee.

Standard inventory of ICE New York floor continued to increase at 842,771 bags as of January 11, 2023. Besides, the weather report in the main coffee growing regions in Brazil is currently raining very favorable to develop a new crop. The above information has put downward pressure on Arabica coffee prices.

According to technical analysis, Arabica’s bearish streak has not stopped. RSI moves to the oversold zone at 27.32%. However, the downtrend is still dominant when the MACD is still diverging downwards, so it is expected that in the short term, Arabica price may continue the downtrend and find support with the next target at 140-141. It is not excluded that the price may correct slightly and then meet the buying force to catch the bottom and recover the technical recovery with the resistance area near 158 – 160. Any recovery span is also an opportunity for customers to get out of the position. Buy at an unfavorable low price.

HINTS BUY/SELL STRATEGY IN THE Session (refer).

NEW BUYING CL:

  • Support zone 1: 140 – 140.5 cents
  • Support zone 2: 137 – 137.5 cents
  • Stop Loss: 132 cents

CL SELL DOWN:

  • Resistance zone 1: 148.5 – 149 cents
  • Resistance zone 2: 153.5 – 154 cents
  • Stop Loss: 157 cents

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