Coffee Elliott Wave Technical Analysis
Since reaching its peak in September 2011, coffee prices have experienced a significant retreat from the highs observed in mid-September 2024. The market seems to have completed a corrective technical structure, signaling the potential for further decline before continuing its long-term bullish trend.
Long-Term Chart Analysis
Historically, coffee prices have fluctuated within a wide range, with key support levels found between $40 and $55, while resistance levels extend from $276 to $337. The current bullish cycle began in May 2019, marking the start of a strong upward movement. This cycle’s first phase peaked in February 2022, representing a period of significant highs. The corrective second phase concluded with a bottom in January 2023. From this point, the market entered the third and ongoing phase of the bullish cycle, which is evolving within a larger corrective pattern under the broader Elliott Wave framework.
The third phase of this rally appears to be unfolding as a corrective wave within the broader impulse that started in 2019. Although the recent price action suggests further gains in the future, a major pullback seems likely before the uptrend continues.
Coffee Commodity Daily Chart Analysis
On the daily chart, the third phase of recovery completed its first leg, labeled wave (W), in April 2023. This was followed by a three-wave corrective structure, wave (X), which found support at 143.70 in October 2023. The following rally corresponds to wave (Y) of the primary degree wave W (circled), marking the completion of this bullish phase.
Wave (Y) of W (circled) seems to have formed an ending diagonal structure, which indicates that the uptrend is losing momentum. If this structure has completed, a corrective pullback in wave X (circled) is anticipated. This correction could manifest as a double zigzag, a complex pattern that typically results in further downside before the primary uptrend resumes.
Coffee Commodity H4 Chart Analysis
On the H4 chart, the completion of wave (Y) of W (circled) is confirmed by the identification of an ending diagonal structure. Therefore, a corrective dip for wave X (circled) is expected to follow. The recent decline since mid-September 2024 suggests that prices are still within the wave (W) of X (circled), supporting a bearish outlook in the short to medium term. Despite this, the long-term outlook remains bullish, with coffee prices likely to resume their upward trajectory after the anticipated correction.
Technical Analyst: Sanmi Adeagbo
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