Expectations of good crop bearish for coffee
Ample world coffee supply expectations weigh on coffee market. Will the coffee prices continue declining?
Coffee prices are under pressure as favorable weather conditions in main producers countries indicate building of ample global supply. Brazil rainfall reports in most of coffee districts support the view of ample good new crop of 2019 in top world producer country. Farmers in Vietnam, second largest world coffee producing country, complain of falling profits as prices decline. And in Indonesia, the fourth biggest coffee producer, supplies from the mini harvest in the southern part of Sumatra this week rose 10-15 percent from last week, according to Reuters. Expectations of ample global supply are bearish for coffee prices.
On the daily timeframe the Coffee: D1 is below the 50-day moving average MA(50) which is falling, this is bearish.
-
The Parabolic indicator gives a sell signal.
-
The Donchian channel indicates downtrend: it is narrowing down.
-
The MACD indicator gives a bearish signal: it is below the signal line and the gap is widening.
-
The RSI oscillator is rising but has not breached into overbought zone yet.
We believe the bearish momentum will continue after the price breaches below the lower boundary of Donchian channel at 95.51. This level can be used as an entry point for placing a pending order to sell. The stop loss can be placed above the last fractal high at 99.54. After placing the order, the stop loss is to be moved every day to the next fractal high, following Parabolic signals. Thus, we are changing the expected profit/loss ratio to the breakeven point. If the price meets the stop loss level (95.51) without reaching the order (99.54), we recommend cancelling the order: the market has undergone internal changes which were not taken into account.
Technical Analysis Summary
|
Position |
Sell |
|
Sell stop |
Below 95.51 |
|
Stop loss |
Above 99.54 |
Want to get more free analytics? Open Demo Account now to get daily news and analytical materials.
This overview has an informative character and is not financial advice or a recommendation. IFCMarkets. Corp. under any circumstances is not liable for any action taken by someone else after reading this article.
Recommended Content
Editors’ Picks
EUR/USD hovers around 1.0700 ahead of German IFO survey
EUR/USD is consolidating recovery gains at around 1.0700 in the European morning on Wednesday. The pair stays afloat amid strong Eurozone business activity data against cooling US manufacturing and services sectors. Germany's IFO survey is next in focus.
GBP/USD steadies near 1.2450, awaits mid-tier US data
GBP/USD is keeping its range at around 1.2450 in European trading on Wednesday. A broadly muted US Dollar combined with a risk-on market mood lend support to the pair, as traders await the mid-tier US Durable Goods data for further trading directives.
Gold: Defending $2,318 support is critical for XAU/USD
Gold price is nursing losses while holding above $2,300 early Wednesday, stalling its two-day decline, as traders look forward to the mid-tier US economic data for fresh cues on the US Federal Reserve interest rates outlook.
Crypto community reacts as BRICS considers launching stablecoin for international trade settlement
BRICS is intensifying efforts to reduce its reliance on the US dollar after plans for its stablecoin effort surfaced online on Tuesday.
Three fundamentals for the week: US GDP, BoJ and the Fed's favorite inflation gauge stand out Premium
While it is hard to predict when geopolitical news erupts, the level of tension is lower – allowing for key data to have its say. This week's US figures are set to shape the Federal Reserve's decision next week – and the Bank of Japan may struggle to halt the Yen's deterioration.