NY coffee to drop to $1.5590

SINGAPORE: New York March coffee is expected to drop to $1.5590 per lb, as it has broken a support at $1.6040.

The support was established by the 61.8 percent Fibonacci retracement of the uptrend from the Oct. 7 low of $1.4860 to the Nov. 8 high of $1.7955. The next support will be at $1.5590, a break below which could cause a further loss to $1.5280.

The chart pattern from Oct. 26 to Nov. 23 looks like a head-and-shoulders, which has two unsymmetrical shoulders. This pattern suggests that low at $1.4860 could be revisited.

A bounce from the current level may be limited to $1.6040.