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September Coffee Due for Short Covering Soon

Posted 07/05/2018 8:38AM CT | Adam Tuiaana

Mixed signals from a weaker Brazilian currency and ongoing uncertainty related to the US/China tough-tariff-talks continue to be the main headline in all commodity futures for the past couple of weeks. Larger exports of Brazilian coffee suggest that the demand is still strong and likely bullish when viewing from the demand perspective. These continued strong export reports, coupled with short-term tight supply, has helped coffee to hold support. However, the key violation of the 115 level earlier this week is in fact continued bearish. The technicals don’t lie, and we are now approaching contract lows. September coffee is struggling for breath at the 11140 area now and it will take an amicable resolution to the aforementioned tariff situation to stabilize (and ultimately reverse) the price of September coffee. We all anxiously await the direction of these tariff talks, but now may be a good time for some short covering and profit taking for those who have been trading coffee to the downside. This senior strategist will be continued bearish, in a big way.

Coffee Sep ’18 Daily Chart

Coffee Sep '18 Daily Chart

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Adam Tuiaana

Senior Market Strategist
Adam grew up in Chicago and was always fascinated by the fast-paced action found in the futures market hub there. He began participating in the financial markets by trading stocks in 1997 and began his career as a trading consultant with RJO Futures in March of 2009. At RJO, he specializes in risk management and disciplined trading plans, and is focused on educating clients with one-on-one consulting and training. Adam believes the best approach to trading is to take a measured and objective approach and let the markets guide your decisions.
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