The fall could be well divided into five small waves, indicating the completion of a bigger motive wave.
Making the completion more convincing is that the fifth wave labeled 5 failed to extend below support at $1.8690, the 61.8 Fibonacci retracement on the rise from the July 15 low of $1.6310 to $2.2545.
Coffee may first test resistance at $1.9430, the 50 percent level, a break above which will open the way towards $2.0165, the 38.2 percent level.
** Wang Tao is a Reuters market analyst for commodities and energy technicals. The views expressed are his own.
No information in this analysis should be considered as being business, financial or legal advice. Each reader should consult his or her own professional or other advisers for business, financial or legal advice regarding the products mentioned in the analyses.