The cocoa futures market has recently seen wide ranges with currency and demand concerns. Although cocoa price remains high at overbought levels, the currency trade and outside factors could change that. Technically, cocoa futures haves been overbought but have fought off this factor to continue to climb towards contract highs. Of late, the stronger dollar, lower euro and weaker pound has hurt demand out of Europe – this has pressured prices and added volatility. Global supply concerns of cocoa have still been able to be the main factor of prices being supported at these levels; but these levels have been trading in 100 point ranges giving traders the idea that this market can move either way at any time. Continue to monitor global demand, grinding data and see where the technicals lead traders over the next week.
Cocoa Jul ’18 Daily Chart