SINGAPORE: New York coffee may test a resistance at $1.2675 per lb this quarter, a break above which could lead to a gain to the next resistance at $1.5090.
These resistances are identified respectively as the 50 percent and the 38.2 percent projection levels of a downward wave C from $2.2910.
This wave was disrupted by a strong support at $1.0255 which caused the current bounce. A falling channel indicates a bounce target around $1.2675.
It is not very clear that the wave C has completed. A break above $1.2675 could suggest the completion of this wave and a higher target at $1.5090 will be established.
However, it could be extremely difficult for coffee to break $1.2675, as a falling trendline will also exert a strong resistance slightly above this level. A decent correction or a resumption of the downtrend could be observed when coffee approaches the trendline.
A break below $1.0255 could simply suggest the continuation of the downtrend towards $0.7265.
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