Elliott Wave Technical Analysis: Coffee - Wednesday, May 15

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Coffee Elliott Wave Analysis

Function - Trend

Mode - Impulse

Structure - Impulse wave

Position - Blue wave iv

Direction - Blue ave v

Details - We now favor an impulse decline from 245.5. The impulse should continue to the 179.7-170.15 Fibonacci zone. Invalidation above 220.

Since April 18, 2024, Coffee prices have sharply declined, erasing gains from the bullish breakout on April 2. Earlier this year, Coffee prices remained sideways until April, when they surged over 28% to reach the April 18 peak. Now, those gains are vanishing. What's next? This blog post outlines our long- and medium-term outlooks for Coffee.

On the daily chart, Coffee prices have been sideways in the long term, characterized by two complete corrective cycles. The second corrective cycle started at 141.85 in January 2023 and completed a double zigzag pattern at 245, the April 2024 high. A third cycle could now follow, forming another corrective structure. The current impulse decline from the April 2024 high may be the first leg - wave (A) of the third cycle, with this being the preferred scenario. While the medium-term outlook is bearish, the near-term focus is on the emerging impulse from the April 2024 high.

On the H4 chart, the impulse from 245.5 is in the third leg - blue wave ‘iii’. Prices are currently around the 200 major level. Wave (iv) could either take a leg higher or may have already been completed. Eventually, prices should decline further for blue wave ‘iii’ and ‘v’ before wave 1 completes. Subsequently, a corrective bounce for wave 2 is anticipated, which could present a significant selling opportunity in the near term. The impulse wave development for wave 1 will be invalidated if prices rise above 245.5.

Technical Analyst : Sanmi Adeagbo