Daily Coffee Market Outlook

NY- Neutral- Friday presented a rather non-descript day once more despite positive non-farm payroll data supporting the USD. May managed to hold above support at 130, just about maintaining its sideways pattern. We see the prospect of holding above 130 likely once more as comments from Sarkozy gave the strongest hints yet that the EU will in fact support Greece if it struggles to fund its budget deficit, arguing the country was 'under attack from speculators'. This is a positive for the Euro and has seen the dollar fall against all major currencies overnight and investors plough into the 'risk trade'. Below support at 130, the next level is 124. To the upside, resistance lies at 133.5 and 137.

Liffe- Sell (3)- The mood for robusta's remains very firmly to the downside as origin and spec selling continue. Fundamentals also hint to the downside as Indonesian coffee production was reported to have risen sharply. Despite a weaker dollar, very little else lies in the way of further declines and as such we remain bearish. With May having clearly broken the 1250 support, the next technical target lies at 1226, and the likelihood of reaching it today is high. To the upside, resistance is way off in the distance at 1280 and 1300.