NY coffee may test support at $1.4470

SINGAPORE: New York September coffee may test a support at $1.4470 per lb, a break below which could cause a loss to the next support at $1.4230.

The support is provided by the 50 percent Fibonacci retracement on the uptrend from the June 27 low of $1.3460 to the July 15 high of $1.5480.

The bounce caused by the support has been shaped into a triangle, which could be a typical continuation pattern. It is expected to be followed by another round of drop towards $1.4230, the 61.8 percent level.

The triangle consists of three waves. It is unlikely to develop one more wave towards $1.5005, the 23.6 percent level. Most likely, the contract will drop below the lower trendline of the pattern.