Today December coffee closed down 60 points at 1.2075. The last two days have represented two candlestick spinning top days. Also, each day the daily highs have been lower than the previous day and the daily lows have been higher than the previous lows. In other words they have been inside trading days. Clearly, the market is consolidating. There is good support around 1.15 and good resistance above 1.2250. A break through of either one of these levels could mean that we are setting a new short term trend.
On a long term basis the trend is still down.
The Dollar is not losing strength. The Brazilian Real is not gaining strength. Rain, although light, is returning to the Brazilian coffee growing areas. However, the world supply of coffee is still low.
Consolidation should continue for a while until more convincing information is available that leans strongly in one direction.