Daily Coffee Market Outlook

NY- Sell (1)- Yesterdays meeting of EU leaders regarding Greek fiscal woes lifted the market initially in the hope that a solution would be thrashed out. However, as is often the case with these things, the accord that was reached disappointed (buy the rumour, sell the fact), and the Euro subsequently faltered. Statements by European leaders left open how the EU will respond to a fresh wave of speculative attacks against Greece or countries such as Spain and Portugal, which are also struggling to cut budget deficits. Despite the dollar gaining strength into the afternoon, the 'C' regained its composure closing a little under unchanged. As the market drifts sideways (halting the recent slide), one must wonder which direction it will take next. In all likelihood, with NY closed on Monday for Presidents day, we see the prospect of some profit taking (albeit cutting losses on the recent highs) and a resulting slide. It is unlikely many traders will want to be left holding long positions over the extended weekend. The switch should dominate proceedings once more, and this is where the action will be, as specs jump on board the firming spread. Resistance can be found today at 135; to the downside, your supports are 130, 128 and 123.

Liffe- Sell (1)- Unlike NY, LDN managed to finish slightly higher yesterday but the move on the back of positive global macro sentiment lacked any real volume and conviction. The range in March remained tight, and held steadily between first resistance at 1315 and support at 1290. Although, with a stronger dollar and question marks over the Greek bailout plan, selling today is unlikely to be spectacular and mostly driven by the switch. We see LDN lower overall, and with this in mind, look for a convincing close below 1290 in order to resume the downward momentum. To the upside as mentioned before, 1315 followed by 1350 are your supply points- the former gaining in importance as the market consitently fails to make a solid break above.