This week in macroeconomics, US homes sales fell, weekly jobless claims rose and Wall Street closed just shy of historic highs as US GDP data showed a slowdown in economic growth. While the Dow manages to cling to the 20,000 point level, the Trump administration’s plans for trade policy have brought uncertainty to global markets. Coffee-producing regions in Brazil noted deficits in precipitation, FOB differentials in Colombia traded firmer at the end of the main crop while most buyers are in eager anticipation of new crop Centrals. Happy Friday.
The market’s recovery from the outset of 2017 continues firm but now fails to find enough fuel to break the $1.55 resistance. This week the C market managed to keep its hold on a tight range though its inability to move beyond near-term resistance levels keeps pricing circling back to $1.52/$1.53. The daily chart below indicates support at $1.5070 and resistance at $1.5620 and $1.6170, while technical indicators show hesitation to climb higher.
The driving force in this increase in pricing comes from the devaluation of the US dollar since the beginning of the New Year, and this week’s bounce in dollar value has tamped down some of the enthusiasm for the C market. Though near-term resistance was firm this week, the market is now about the average price level for the last five years and warrants close attention with the Central American crop so close at hand.