Sugar futures broke down at key support on the long term chart to establish a decisively bearish close to Friday's trading session. .After a sustained sideways price action inside of a Triangle chart pattern, sugar sold off below trend line support on very strong momentum.
After setting highs well above 30 cents per pound for the first time since the 1970's, the market began selling off to form the support and resistance levels of the triangle. As the price approached the apex last week, sellers got the upper hand to push the price down nearly 2 cents a pound an initiate the technical breakout to the downside.
The projected price target suggests the move lower will continue, perhaps quickly in light of the 10-bar momentum reading behind the initial drop. The forecast suggests a drop to a minimum of 26.32 cents per pound to complete the pattern, with the lower end of the range at 23.86 cents pr pound also possible. If achieved, this would do longer term technical damage to the chart, and call into question sugar's ability to overtake the overhead resistance and make new highs for the year.
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