Cocoa breaks down to some key technical support levels
A day after the Federal Reserve cut a quarter of a point in reaction to weaker economic signs, cocoa prices continued to sag. Prices ended the last day of July hovering just above two key technical levels of support: the 200-day moving average ($2,344) and the uptrend support line ($2,340). Those levels were challenged on the Aug. 1 session, which closed below them at $2,329 after testing retracement support around $2,320.
Starting in June, funds jumped back earnestly into the market on news that Ghana and Ivory Coast were seeking a minimum price of $2,600 per MT and a $400 Living Income Differential (LID) for farmers. However, speculators may have been premature, failing to note the finer details like the fact that these changes would not be implemented before October 2020, the start of the 2020/21 season.
Sep-19 NY cocoa, 200-day moving average, uptrend support line
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