Coffee Futures—Coffee futures in the September contract is currently trading lower by 45 points at 107.00 a pound as prices are near a 3 week high looking to retest the June 4th high of 108.60 in my opinion and if that is broken you’re looking at a 4 1/2 month high.
At the present time I’m not involved in coffee, but it certainly looks to me that prices have bottomed out but the chart structure is poor therefor the risk/reward is not in your favor as the 10 day low is too far away to initiate a new trade in my opinion.
We could be involved possibly in next week’s trade as the commodity markets in general have started bullish trends across the board as the U.S dollar may have topped out in the short term as the Brazilian Real has now hit a 3 month high which is bullish towards coffee prices. Coffee is trading above its 20 & 100 day moving average as drier weather conditions have entered the country of Brazil as harvest is in full swing as a large crop will be produced once again bringing large supplies onto the market as seasonably speaking harvest pressure can keep a lid on prices.
Volatility is starting to pick up which is a good thing to see as I will not take a short position at the present time as I do not have any soft commodity recommendations, however they all look to move higher in my opinion.
CHART STRUCTURE: POOR
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