Before day traders participate in the Coffee Arabica market as sellers start to celebrate, they should remind themselves that their profits need to be cashed in and not simply virtual returns on their brokers’ platforms.
Coffee Arabica continued its recent downturn this past week in an impressive manner, breaking below the $300.00 level on Tuesday and Wednesday and showing little desire to launch a violent reversal upwards.
Coffee Arabica went into this long U.S Labor Day weekend near the $292.00 mark and produced a low around $288.69 on Thursday. The price differential between the high and low for the week was a mere $27.00, this as the high for Coffee Arabica touched the $315.50 vicinity early on Monday. And this is another key point regarding current sentiment in Coffee Arabica, the momentum lower in the commodity held steady. Friday’s closing prices were not much higher than Thursday’s depths.
Top Regulated Brokers
Prices Return to Late June Levels and El Nino Concerns
Yes, we have seen lower prices in Coffee Arabica before only to see upwards price action develop like a couple of months ago. However, current values in the commodity are now traversing marks in late June, this just before the summer (winter) harvest and weather concerns from Brazil started to influence the marketplace. The current price of Coffee Arabica is standing at a dangerous juncture for day traders who are contemplating further pursuit of lower depths.
While crop reports from Brazil have been outstanding, via large harvests, there is certainly enough ammunition left in large players speculative capabilities to try and reverse the market higher again. Concerns about the ‘impending’ El Nino which may hit South America in December and January should be taken seriously. But there is also admittedly conflicting outlooks regarding what the weather pattern could do in Brazil based upon the locations of growers in the south of the nation, compared to those located further north. And importantly there are concerns about logistical complications regarding problems trying to get a proper amount of containers to ship Coffee from Brazil to buyers.
Reminders About Speculative Influences and Cautious Leverage
However, the ability of Coffee Arabica to emerge with lower prices and now be standing at a not so coincidental technical juncture certainly is interesting from a speculative point of view.
Let’s remember too while Brazil produces plenty of the Coffee Arabica in the world, it is not the only supplier.
Producers are active elsewhere in South America, Africa and Asia.
The price of the commodity was frequently below the $290.00 ratio from early February of this year until late June.
But before retail traders consider lower targets they should be wary of the power large players have in the Coffee Arabica market and use this as a cautionary reminder in order to limit their leverage and about fantasizing about incredible profits.
Coffee Weekly Outlook:
Speculative price range for Coffee Arabica is $279.00 to $314.00
The lower prices achieved in Coffee Arabica from a technical standpoint are intriguing for those considering more wagers on lower momentum to develop. But before traders step into the swift velocity that is always surrounding the commodity via prices, they should also note that volumes in Coffee Arabica will be intense on Tuesday upon the return of North American futures markets.
The price below $300.00 is a key barometer and now the next few days of trading will offer some evidence regarding current sentiment within larger players. If the current lows being demonstrated in Coffee Arabica prove durable then there would seem to indicate lower price action achieved earlier this year could be conceivable target areas. However, day traders likely do not have the capability to hold onto a trade longer than a day in many cases, this means their speculative wagers must combat the constant intraday reversals that are frequently exhibited in the Coffee Arabica market.
Ready to trade our Forex weekly forecast? Here’s a list of some of the best Futures Brokers For Commodity Trading to check out.