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Coffee Showing Weak Technical Action in Short-Term, Long-Term Outlook Positive

Posted 11/16/2018 8:21AM CT | Tony Cholly

While the coffee market is reaching low RSI numbers (oversold) and looking for a short term low, the continued decline in the open interest is a negative factor and the technical actions remains sluggish as well.  March coffee closed slightly lower on the session yesterday, but did salvage a little bounce off of the early morning lows, which reached as low as down 3%.  The market is down over 2% since Monday. Harvest in Vietnam should be slowed by heavy rains this weekend, while Indonesia is also expecting heavy storms, although those will be isolated. Weakness in Vietnamese cash markets were a bearish force on the session to help pull the market lower yesterday. With conditions in oversold territory, it will not take much positive news to spark a bounce from these levels.  March coffee has support coming in at 110.20 and 109.10.  Resistance is at 115.95 and 118.75.

Coffee Mar ’19 Daily Chart

Coffee Mar '19 Daily Chart

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Tony Cholly

Senior Market Strategist
Tony majored in Economics at Eastern Illinois University. He performed his thesis on the market price of corn in the market and the factors that affect it. Tony was drawn to futures trading because of the opportunity to have financial gains in an economic environment. He prides himself on working with customers one-on-one and developing a trading strategy based on the client's needs and wants.
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