NY coffee could retest resistance at $1.3535 in Q4
- The contract is riding on a wave C from $0.9455, the third wave of a presumed three-wave cycle from the May 2019 low of $0.8760.
SINGAPORE: New York coffee may retest resistance at $1.3535 per lb this quarter, a break above which could lead to a gain to $1.5225.
The downtrend from the May 2011 high of $3.0890 has reversed, as suggested by a break above a falling trendline. Coffee not only broke the trendline, but also hovered above it for almost an year.
The contract is riding on a wave C from $0.9455, the third wave of a presumed three-wave cycle from the May 2019 low of $0.8760.
This wave observed closely is a set of projection levels of a preceding wave (c) from $1.7955. The resistance at $1.3535, the 38.2pc level, stopped the rally twice.
However, the rally looks incomplete.
It may extend to $1.4940, the 100pc projection level of the wave C.
Coffee seems to have stabilized around a support at $1.08, which is strengthened by another one at $1.0750.
The correction from the September high of $1.3545 is supposed to be much weaker than the first one from the Dec. 2019 high of $1.4245.
Most likely, coffee would rise towards $1.3535.
A break below $1.0750 could open the way towards $0.9110.
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