Coffee prices came under intense pressure as global supply dynamics improved despite the soaring Brazilian real. It dropped to a low of $2.80on Friday, its lowest level since July last year, and by 35% below the highest level in 2025.
Coffee has retreated in the past few weeks as investors watched the recent Brazilian harvest. In a recent note, Conab, a top forecasting agency, noted that Brazil’s harvest will jump by 17% this year to over 66.2 million bags. This increase happened because of the recent rains in the country.
The same trend has happened in Vietnam, a top player in the coffee industry, which has boosted arabica shipments recently. Data shows that the country’s exports jumped by 38% in January. Additionally, the most recent WASDE report showed that world coffee production will jump by over 2% this year.
Coffee prices have soared despite the rising Brazilian real. Data shows that the currency strengthened to 5.2 against the US dollar. The USD/BRL pair peaked at 6.3 in December 2024.
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Coffee Price Technical Analysis
The three-day chart shows that the coffee price has slumped in the past few months. This retreat happened after it formed a double-top pattern at $434 and a neckline at $280, its lowest level in July last year. A double-top is one of the most common bearish reversal signs in technical analysis.
It has moved slightly below the 50%Fibonacci Retracement level. Also, it dropped below the 50-day Exponential Moving Average, while the Relative Strength Index (RSI) continued falling to 30. Coffee remains below the Ichimoku cloud indicator.
Therefore, the most coffee price forecast is bearish, with the next key target being at the 61.8% Fibonacci Retracement level at $255. On the other hand, a move above the key resistance level at $325, the 38.2% retracement, will invalidate the bearish outlook.