ICE Coffee Futures (KC) Technical Analysis – December 15, 2016 Forecast

March ICE Coffee futures are trading lower on Thursday in reaction to the stronger U.S. Dollar. A stronger dollar tends to weaken the Brazilian Real which typically leads to increased farmer selling of coffee.

Technical Analysis

The main trend is down according to the daily swing chart. However, momentum shifted to the upside with the formation of a closing price reversal bottom at $138.75 and the subsequent follow-through rally. A trade through this price will negate the chart pattern and signal a resumption of the downtrend.

The major Fibonacci level at $146.45 is the first upside target, followed by the major 50% level at $152.80.

On the downside is the June 13 bottom at $138.85. If this price fails then look out to the downside because the next targets are $128.15 and $126.00.

Forecast

Based on the current price at $142.55 and the earlier price action, the direction of the market today is likely to be determined by trader reaction to the short-term uptrending angle at $141.75.

A sustained move under $141.75 will signal the presence of sellers. This is followed by the uptrending angle at $140.25. This is the last potential support angle before the $138.75 main bottom.

A sustained move over $141.75 will indicate the presence of buyers. This could generate enough upside momentum to challenge the long-term uptrending angle at $145.70. This is followed by the Fib at $146.45.

The Fib level at $146.45 is the trigger point for an acceleration to the upside with $152.80 the next major upside target.

Watch the price action and read the order flow at $141.75 today. Trader reaction to this angle will set the tone for the day. If the dollar continues to strengthen then look for more downside pressure.