Technical Analysis #C-COFFEE : 2019-03-22

0
301
views
IFCMarkets Technical Analysis
IFCMarkets Technical Analysis

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.

Coffee falling below MA(50) 03/22/2019 Technical Analysis IFC Markets chart

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

Related articles:

Trading Bitcoin futures is now available by IFC Markets
GeWorko Method from IFC Markets

Click here to open an account at IFC Markets.