SINGAPORE: New York coffee is expected to test a resistance at $1.5760 per lb over the next four weeks, with a good chance of breaking above this level and rising towards $1.7125.
The contract has resumed its uptrend after completing a pullback towards $1.4070, the 23.6 percent Fibonacci retracement on the downtrend from the Oct. 13, 2014 high of $2.2910 to the March 1, 2016 low of $1.1340.
The next resistance will be at $1.5760, the 38.2 percent level, a break above which could open the way towards the 50 percent level at $1.7125.
An inverted head-and-shoulder forming between September 2015 and June 2016 has been confirmed, suggesting a target between $1.5760 and $1.7125. A rising wedge indicates a target close to $1.7125 as well.
Another Fibonacci retracement analysis on a bigger downtrend from the May 3, 2011 high of $3.0890 to the Nov. 6, 2013 low of $1.0415 reveals coffee is about to break a resistance at $1.5245.
This resistance is tested the second time, and may be broken soon. The break could open the way towards $1.8235.
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