Daily Coffee Market Outlook

NY- Sell (1)- Stormy seas of late in NY were becalmed somewhat yesterday as ICE 'C' managed to close small up for the day. However, we see this as little more than restbite pending further losses. The macro picture worsened somewhat Tuesday as German consumer confidence dipped, followed by the US consumer confidence measure which continued the trend. EU periphery fears continue to weigh on the market, and the momentum remains firmly to the downside as traders await the next leg lower. We look for a challenge in the short term of support at 128.50 and further, 123. To the upside, 135 should keep a lid on things.

Liffe- Sell (1)- May teeters 'on the brink' in LDN as it seems the whole of the spec community has been jumping onto the current downtrend and daily weakness with all guns blazing. Looking at the open interest and listening to market commentators, the system short position is now at one of its highest levels this year and this looks unlikely to change in the short term as macro developments weigh on the market. Although LDN took a breather yesterday from Mondays slide, we see the prospect of more weakness today, especially should May close below 1250. To the upside, we need a close above 1280 to give longs any form of hope and before shorts start to think about liquidating.