Coffee Update
Commodity price moves often end in a sharp spike which has not been witnessed yet with the current move in coffee. If price does spike higher a reasonable upside target is previous resistance at 1.8 (+27% move). However, there is some bearish divergence where the price is making higher highs but the relative strength index is making lower highs. This reflects a reduction of momentum and is a sign that the move could be close to ending and reversing.
If price continues to rise as long as the relative strength index is making lower highs the move is becoming increasingly unsustainable. When the price peaks Fibonacci retracements levels measured from the bottom to the top of the move can provide possible downside targets, often at the 0.383% and 0.618% levels.
Ultimately coffee began a new bull market in 2021 and should see much higher prices in the long term.
If price continues to rise as long as the relative strength index is making lower highs the move is becoming increasingly unsustainable. When the price peaks Fibonacci retracements levels measured from the bottom to the top of the move can provide possible downside targets, often at the 0.383% and 0.618% levels.
Ultimately coffee began a new bull market in 2021 and should see much higher prices in the long term.
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