Arabica coffee term 03/2023 (KCEH23) ended a series of consecutive days of decline, reversed to increase, increased by 5.50 cents (+3.82%), the price closed at 149.40 cents/lbs.
The USD had a falling session after the US consumer price index (CPI) data in December 2022 was released with a decrease in price growth compared to November 2022, which led to expectations of a rate increase of the US dollar. The Fed will also reduce next month. Coffee prices on both bourses benefited, having had a bullish reversal after many consecutive price drops. The Brazilian Real continued to decline at 1 USD = 5.1087 BRL. The decrease in the value of the local currency has restrained the recovery momentum 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, yesterday’s impressive reversal rally ended the series of consecutive declines of Arabica’s price, but unlike Robusta, the bullish reversal signal has not yet appeared. The technical indicators give neutral signal and the price trend is not clear yet. It is expected that in the short term, Arabica price may struggle to accumulate within the range of 145 – 160. Any recovery is an opportunity for customers to get rid of their buying position at unfavorable low prices.
HINTS BUY/SELL STRATEGY IN THE Session (refer).
NEW BUYING CL:
- Support zone 1: 145 – 145.5 cents
- Support zone 2: 141 – 141.5 cents
- Stop Loss: 138.5 cents
CL SELL DOWN:
- Resistance zone 1: 152 – 152.5 cents
- Resistance zone 2: 154.5 – 155 cents
- Stop Loss: 159 cents
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