Coffee prices have surged to all-time highs near $440, following the post-COVID commodity boom. While most of us love coffee, this rally might soon give us cheaper beans—and a profitable short opportunity.
Why Bearish?
RSI Divergence: Weekly RSI shows strong bearish divergence, signaling momentum exhaustion.
Volume Disparity: Price climbed while volume weakened—a classic reversal setup.
Macro Factors: Brazil’s crop outlook is improving, El Niño impact fading, and global demand softening amid economic uncertainty.
Seasonality: Historically, post-harvest periods see price corrections.
COT Data: Large speculators are trimming long positions, adding to bearish sentiment.
Key Levels:
Resistance: $440(recent high).
Support: $290 (first major zone), $160 (long-term trendline).
Trade Setup:
Target: $160 for a potential 57% downside.
Stop-Loss: Above ~$475.
Watch USD strength and commodity indices for confirmation. If the dollar continues to firm, coffee prices could accelerate lower.
Risk/Reward: Attractive for swing traders with patience.
What do you think—are we about to see a major correction in coffee?
Why Bearish?
RSI Divergence: Weekly RSI shows strong bearish divergence, signaling momentum exhaustion.
Volume Disparity: Price climbed while volume weakened—a classic reversal setup.
Macro Factors: Brazil’s crop outlook is improving, El Niño impact fading, and global demand softening amid economic uncertainty.
Seasonality: Historically, post-harvest periods see price corrections.
COT Data: Large speculators are trimming long positions, adding to bearish sentiment.
Key Levels:
Resistance: $440(recent high).
Support: $290 (first major zone), $160 (long-term trendline).
Trade Setup:
Target: $160 for a potential 57% downside.
Stop-Loss: Above ~$475.
Watch USD strength and commodity indices for confirmation. If the dollar continues to firm, coffee prices could accelerate lower.
Risk/Reward: Attractive for swing traders with patience.
What do you think—are we about to see a major correction in coffee?
Trade active
Monthly RSI divergence even crazier! Caution is also required as a bullish H&S pattern has emerged alongside a daily cross with the prices holding!
BEAR in mind that the daily MACD has turned negative now too!
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.