Coffee Futures Mired in Solid Price Downtrend

ICE Futures U.S. coffee for May delivery is presently trapped below a 2.5-month-old downtrend on the daily bar chart. Prices last week hit a fresh five-month low. Bears remain in firm technical command. The next downside price objective for the coffee market bears is pushing and closing May futures below solid technical support at last week's low of $1.2825 a pound. That would then open the door to a quick challenge of strong support at the September 2009 low of $1.2475.

For the coffee market bulls to begin to regain some upside near-term technical momentum, the will have to push and close May futures prices back above solid technical resistance at $1.3500. Above that lies strong chart resistance at the last "reaction high" on the daily chart, at $1.3735. Coffee futures traders will continue to keep one eye on the influential "outside markets" that include the U.S. dollar index, crude oil and the U.S. stock indexes. The stronger U.S. dollar recently has been a bearish downside weight on the coffee futures market. Stay tuned! Jim Wyckoff