Sugar futures have just completed a leg up inside of a long term Channel chart pattern and are now poised for a retracement. The uptrend completed a breakout from a Descending Wedge chart pattern on a shorter time frame, and the successful rally has shifted the overall trend back to a bullish formation.
The Channel Down is illustrated here on the 240-inute time interval, showing the pullback from resistance at the 28.30 cents per pound level. The market may now trade sideways to lower to retest the channel support currently resting just below 27.00 cents per pound.
This channel may prove to form the guidelines for the trading range over the course of this new uptrend, allowing for swing trading inside the pattern. A move above the swing highs would initiate an upside breakout, while a move below the support would indicate a pattern failure and possible retracement back to the 24.00 cent level where the channel began.
Sugar has maintained its historically high prices throughout the recent commodities correction, pulling back from the 32 cent range but remaining at multi-year highs. This portends a possible run to even higher highs should the rest of the commodities complex recover from recent losses.
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