ICE Coffee Climbs in Corrective Move -- Technical AnalysisKira Brecht
ICE March coffee futures are climbing on Wednesday, as the market strengthens in a counter-trend
rally move. The primary trend for March coffee futures is bearish and for now the gains are merely
corrective to the downtrend pattern.
ICE March coffee recently traded up 425 points at $1.6500 a pound.
On Feb. 3, the March coffee contract slid to its lowest level since late February 2014, marking
out near-term support at $1.5840. Wednesday's gains have propelled the coffee contract above its
initial 10-day moving average resistance at $1.6302, which is a minor short-term positive signal.
Overall, a daily downtrend pattern is seen on the March coffee chart from the October 2014 peak at
$2.2910. The most recent swing high resistance comes in at $1.6990, the Jan. 28 daily high. That
level is a target and resistance for the bulls near term. Sustained gains above that swing high
would be needed to confirm a minor near-term bottom on the daily chart and to open the door to a
more significant counter-trend move. If initial resistance at $1.6990 holds firm, the technical
trend favors sideways to lower trade.
On the upside, if the bulls manage to plough through resistance at $1.6990 it would trigger a
minor bullish chart signal. Next upside resistance is seen at the 40-day moving average, at $1.7040,
and then a major swing high resistance ceiling at $1.8490, the Jan. 12 daily high.
Daily momentum studies are moderately favorable. The nine-day relative strength index is pointing
higher at 48% in midmorning trade.
Nearby support has formed at $1.5840, but gains above resistance at $1.6990 would be needed to
confirm a minor bottom and to open the door to more significant counter-trend strength in the coffee
market.
rally move. The primary trend for March coffee futures is bearish and for now the gains are merely
corrective to the downtrend pattern.
ICE March coffee recently traded up 425 points at $1.6500 a pound.
On Feb. 3, the March coffee contract slid to its lowest level since late February 2014, marking
out near-term support at $1.5840. Wednesday's gains have propelled the coffee contract above its
initial 10-day moving average resistance at $1.6302, which is a minor short-term positive signal.
Overall, a daily downtrend pattern is seen on the March coffee chart from the October 2014 peak at
$2.2910. The most recent swing high resistance comes in at $1.6990, the Jan. 28 daily high. That
level is a target and resistance for the bulls near term. Sustained gains above that swing high
would be needed to confirm a minor near-term bottom on the daily chart and to open the door to a
more significant counter-trend move. If initial resistance at $1.6990 holds firm, the technical
trend favors sideways to lower trade.
On the upside, if the bulls manage to plough through resistance at $1.6990 it would trigger a
minor bullish chart signal. Next upside resistance is seen at the 40-day moving average, at $1.7040,
and then a major swing high resistance ceiling at $1.8490, the Jan. 12 daily high.
Daily momentum studies are moderately favorable. The nine-day relative strength index is pointing
higher at 48% in midmorning trade.
Nearby support has formed at $1.5840, but gains above resistance at $1.6990 would be needed to
confirm a minor bottom and to open the door to more significant counter-trend strength in the coffee
market.
