The coffee price is one we covered early this year. We made the point in our Coffee Price Forecast 2019 that it is a market readying itself to breakout or breakdown. We identified $1.17 as the breakout point, and our thesis was that once broken out it would fast move to $2. This never happened, and the price action was bearish consequently. What’s next?
Because of this very interesting setup in this market we will write a new annual forecast for the price of coffee. Stay tuned for our coffee price forecast 2020 which will be out any time soon.
In the meantime we go back to this year’s forecast, and look back at the critical price points we had identified:
- P1 Bullish above $1.17
- P2 Bearish below $1.0
- P3 Major peak at $2.0
Only P2 changed slightly. It has now become $1.1250.
And that’s exactly the point: a bearish triangle has this typical characteristic that the longer its bear market continues the lower the resistance (hence breakout) level.
When it comes to the coffee price chart we see now the falling trendline coming close to the horizontal one. In other words price will soon move to the apex.
In our own words: the chart will soon force coffee to choose a direction.
We stick to our $2 only if and when coffee breaks out which is above $1.1250. The longer this process takes to execute the higher the profit potential.