NY coffee may drop to $1.2525

SINGAPORE: New York Sept. coffee may drop to $1.2525 per lb, as it has broken a support at $1.2755.

The support was provided by the 23.6 percent Fibonacci retracement on the uptrend from the June 22 low of $1.1550 to the July 6 high of $1.3130. The next support is at $1.2525, a break below which could cause a further loss to $1.2340.

A break above $1.2757, now a resistance, may not necessarily indicate a resumption of the uptrend. The resumption will be suggested only when coffee breaks above a higher resistance at $1.29.