Robusta coffee term January 2023 (LRCF23) reversed to increase, increasing by 43 USD (+2.34%), closing price at 1,882 USD/ton.
The FED officially raised interest rates by 0.75% in the meeting last night, bringing the benchmark interest rate of the US Central Bank to fluctuate from 3.75% to 4%, the highest since January 2018. This is something the market has long anticipated, what they care about is that the Fed chair signaled that there will be continuous interest rate hikes to bring interest rates up to a level that can restrain inflation and bring inflation back to the target level. 2%. The USD appreciated after this statement. Commodity market has a divergence of ups and downs in which coffee on both bourses is in the opposite direction of good gain.
According to the General Statistics Office of Vietnam, accumulated coffee exports in the first 10 months of crop year 2022 reached about 1.4 million tons, up 10.6% over the same period last year. However, yesterday’s correction was influenced by the fact that the price had gone deep into the oversold area and was quite low, so it was enough to stimulate a part of investors to open a new buy position.
According to technical analysis, all technical indicators are showing signs that the bearish momentum is still there but has weakened. The RSI is at 29.33% still in the oversold zone. It is expected that the price may continue to struggle to gain and recover but it is not sustainable. Only when surpassing and sustaining above the 1920-1930 zone can the uptrend be well activated. In contrast, the old bottom of 1820-1830 is a hard support for Arabica coffee prices.
HINTS BUY/SELL STRATEGY IN THE Session (refer).
NEW BUYING CL:
- Support zone 1: 1845-1850 USD,
- Support zone 2: 1815-1820 USD,
- Proportional buy, stop loss $1790.
CL SELL DOWN:
- Resistance level 1: 1895-1900 USD,
- Resistance level 2: 1920-1925 USD,
- Sell proportionally, stop loss 1950 USD.
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