Arabica coffee term 12/2022 (KCEZ22) was mixed with coffee on the London floor, down 1.05 cents (-0.47%), closing price of the old session at 222.20 cents/lbs.
In his latest speech, the FED chairman reiterated that he will continue to raise interest rates to curb inflation and should not ease monetary policy soon. The dollar continued to appreciate after that statement, rising 0.2% to 109.90. Real is currently trading around 1 USD = 5.2070 BRL, supporting producers to boost sales.
Inventories of coffee meeting New York floor standards as of September 7 continued to decrease to 613,713 bags, but this factor is no longer reflected in prices. Brazil has completed 95% of the harvest and is promoting sales when the real exchange rate is in favor of producers. The supply of goods increased while the USD appreciated against the basket of goods, causing the price of Arabica to be under downward pressure.
According to technical analysis, MACD is converging down, showing bearish momentum still. If the price continues to break through the MA 50-100 at 220-221, it could be a bad scenario for Arabica coffee with the next support at 214-215 and beyond at 210.
In general, both monetary factors and fundamental information are supporting the sellers and the RSI after many falling sessions is still at the average of 50%, so the way for the price to decrease is still open.
Customers should consider not catching the bottom to open a new buy position during this period.
HINTS BUY/SELL STRATEGY IN THE Session (refer).
NEW BUYING CL:
- Support zone 1: 219.5 – 220 cents
- Support zone 2: 217-217.5 cents
- Stop Loss: 213 cents
CL SELL DOWN:
- Resistance zone 1: 226.5 – 227 cents
- Resistance zone 2: 229-229.5 cents
- Stop Loss: 233 cents
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