We all want COFFEE to be cheaper, but uptrend might hold on!
Although most CFD-traders might don't care - COFFEE is an interesting commodity right now, especially with current trends with nervous stock markets/indices.
In general:
- Coffee prices correlate with DXY and stock indices/VIX. Especially when stock markets go down
- Coffee is in higher demand as it is used as hedge against falling stock prices
- Coffee is in a long-term bull-market
If correlations align, especially if stock markets decrease more, there is more upside potential for the Coffee price.
CRITICAL WATCHING POINTS
Correlations for taking a LONG on COFFEE:
DXY (Dollar Index):
- Above 100.50 = BEARISH for coffee
- Below 99.70 = BULLISH for coffee
SPX/Stock Indices:
- Rally (VIX < 18) = BEARISH for coffee
- Weaken (VIX > 23) = BULLISH for coffee
BCOM:
- Break below 107 = BEARISH for commodities/coffee
- Break above 108.50 = BULLISH for commodities/coffee
Coffee Major Support Zone:
Hold above 355 = bull market intact
Break below 350 = could be a major problem (or we finally get cheaper coffee in the supermarket?!)