December Coffee Correcting After RallyPosted 11/07/2018 9:07AM CT |
After such a major rally over the past month, it would appear natural for the market to meet resistance, and ultimately correcting as it should. A large supply still awaits next season and we’ve also seen some weakness in the Brazilian currency, but strength in the equities market may help coffee prices hold support at these levels.
Technically, it appears that December coffee prices may be forming a bullish pennant continuation pattern to the upside. A break at the apex of the pattern (approx. 116 level) may push coffee prices quickly above the 200-day MA, for a run back to the 125 level. This pattern will likely continue to formulate over through the balance of November, with the apex of the pattern plotted to be reached in the beginning of December. Likewise, a break down at the apex could send coffee prices back down to the 110 level in a massive hurry.
Coffee Dec ’18 Daily Chart