Arabica coffee term 03/2023 (KCEH23) was unchanged because yesterday the market was on New Year’s holiday, the old session closed at 167.30 cents/lbs.
The USD ended the session with a slight increase in the context of the US market on New Year holiday. The market is still watching the economic information and indicators to be released this week in the US to be able to predict the next actions of the Fed on the pace of interest rate hikes in the new year. DXY Index slightly increased 0.19% to 103.68. The Brazilian Real rose slightly at 1 USD = 5.3638 BRL. This exchange rate is attractive enough to stimulate Arabica producers to boost sales, putting pressure on the recovery of Arabica coffee prices.
Standard inventories of ICE New York floor continued to increase at 808,201 bags as of December 29, 2022. This factor puts downward pressure on Arabica coffee prices.
According to technical analysis, the RSI is moving towards the average level of 48.7% while the MACD is about to converge, so in general, the price trend has neutral signals and is not clear. It is expected that in the short term, Arabica price may continue to struggle in the range of 160 – 175 with downward pressure due to basic information on abundant supply and favorable Brazilian weather, especially monetary factors. The attraction of speculative cash flows is still having a negative impact on Arabica prices in the short term.
HINTS BUY/SELL STRATEGY IN THE Session (refer).
NEW BUYING CL:
- Support zone 1: 164 – 164.5 cents
- Support zone 2: 161 – 161.5 cents
- Stop Loss: 157 cents
CL SELL DOWN:
- Resistance zone 1: 171 – 171.5 cents
- Resistance zone 2: 175.5 – 176 cents
- Stop Loss: 179 cents
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