Well-below average trading keeps Coffee under pressure

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Coffee drops 6.06% today to USX307.08

Highlights

Reduced rainfall chances in Vietnam's Central Highlands have heightened concerns about robusta coffee crop yields and global supply.
Despite short-term supply fears lifting robusta futures, the coffee market remains under persistent selling pressure.
Robusta coffee trades below major moving averages, with momentum indicators showing oversold conditions and a likely range of $281.57 to $316.85 over the next four days.

Vietnam rain risk and supply fears buoy sentiment amid selling

Weather developments in Vietnam’s Central Highlands lessened the likelihood of rain, a situation that could impact crop yields in one of the world’s top coffee-growing regions. According to Barchart, this contributed to a move higher in robusta coffee futures, with broader supply concerns temporarily supporting the market. Nonetheless, price action for Coffee has remained under broader selling pressure.

Technical barriers and oversold signals reinforce bearish momentum

On the H4 timeframe, KC/USX is trading below the MA-20 at USX321.30 and the MA-50 at USX323.31, with the MA-200 at USX320.70 also above the current price. The Ichimoku Kijun sits at USX325.21, providing immediate resistance. Momentum signals remain negative as shown by both the MACD and Awesome Oscillator, while ADX is neutral and does not indicate a strong trend. RSI, Stoch RSI, CCI, and Bull/Bear Power are all registering oversold readings, indicating sustained selling dominance on an intraday basis.

Bias for range-bound trade as recovery chances remain limited

For the upcoming four trading days, the expected price range is USX281.57 to USX316.85. Given a 26% probability of an upside move, the downside scenario remains favored by the forecast model. The baseline outlook is for KC/USX to consolidate within this volatility band as price movement moderates. Should the price reclaim USX325.21, a recovery bias would be confirmed, while a break below USX281.57 would likely lead to further declines.

Viktoras Karapetjanc, expert at Traders Union, sees short-term downside pressure persisting in coffee despite a recent bullish reaction to weather risks in Vietnam. He notes that macro supply concerns may lend support, but the broader technical and sentiment backdrop skews negative for now. The baseline scenario remains consolidation within the current range unless resistance at USX325.21 is reclaimed. In his words: “Any further upside in coffee will need confirmation above USX325.21, but fundamental risks to supply are worth monitoring closely.”

Earlier, analysts noted that Coffee futures were under sustained bearish pressure as technical signals highlighted heightened downside risk. The current outlook reinforces this trend, suggesting that traders should closely monitor USX281.57 as a critical support level that could trigger further declines if broken.

Source of Data: KC Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

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