Coffee Prices Hit A 4 Year Low

Coffee Futures---Coffee futures in the September contract is currently trading lower by 100 points at 108.25 a pound lower for the 2nd consecutive session closing here would be a 4 year low while ending the day on a sour note.

On July 6th coffee prices had a 700 point reversal as a possible spike may have occurred, but that is not the situation as we are right at those lows once again as this market remains on the defensive and it looks to me that prices will retest the 100 level in the coming days or weeks ahead. I am not involved in this market as I'm certainly not recommending a bullish position at this time as the chart structure is terrible as prices went straight up and then straight down so be patient as I think the 100 level could be an outstanding opportunity to bottom fish as the agricultural sector still remains very weak.

The U.S dollar hit a 1 year high in today's trade also putting pressure on coffee prices as the harvest is about 50% complete in the country of Brazil which is the largest producer of coffee in the world as seasonally speaking a bottoming out pattern should develop in the next 3/4 weeks as a large crop comes on the market therefore depressing prices in the short term. Coffee prices are still trading far below their 20 and 100 day moving average as the trend is to the downside as the volatility still remains relatively low, but I don't see prices going much below 100 as we are squeezing blood out of a turnip at this point.

TREND: ---LOWER

CHART STRUCTURE: IMPROVING

VOLATILITY---LOW

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