Technical Analysis #C-COFFEE : 2019-09-12

Lower Columbia coffee output bullish for coffee price

Columbia coffee output declined in August. Will the coffee prices continue rising?

Columbia coffee production in August 2019 amounted to 1.119 mln 60-kg bags, down 11.0% from 1.258 mln in the same month last year, data from the Fedecafe - National Federation of Coffee Growers show. Columbia is the third largest coffee producing nation in the world - 810,000 metric tons of coffee beans in 2016. Lower Columbia coffee output is bullish for coffee prices.

COFFEE breached above MA(50) 09/12/2019 Technical Analysis IFC Markets chart

On the daily timeframe the Coffee: D1 has breached above the resistance line and the 50-day moving average MA(50), these are bullish developments.

  • The Parabolic indicator gives a buy signal.
  • The Donchian channel indicates uptrend: it is titled up.
  • The MACD indicator gives a bullish signal: it is below the signal line and the gap is narrowing.
  • The RSI oscillator is rising but has not breached into overbought zone yet.

We believe the bullish momentum will continue after the price breaches above the upper boundary of Donchian channel at 102.75. This level can be used as an entry point for placing a pending order to buy. The stop loss can be placed above the last fractal low at 94.49. After placing the order, the stop loss is to be moved every day to the next fractal low, following Parabolic signals. Thus, we are changing the expected profit/loss ratio to the breakeven point. If the price meets the stop loss level (94.49) without reaching the order (102.75), we recommend cancelling the order: the market has undergone internal changes which were not taken into account.

Technical Analysis Summary

Buy stop Above 102.75
Stop loss Below 94.49

Start trading with IFC Markets

We are ready to support you with any kind of questions, 24 hours a day.

Note: This overview has an informative and tutorial character and is published for free. All the data, included in the overview, are received from public sources, recognized as more or less reliable. Moreover, there is no guarantee that the indicated information is full and precise. Overviews are not updated. The whole information in each overview, including opinion, indicators, charts and anything else, is provided only for familiarization purposes and is not financial advice or а recommendation. The whole text and its any part, as well as the charts cannot be considered as an offer to make a deal with any asset. IFC Markets and its employees under any circumstances are not liable for any action taken by someone else during or after reading the overview.