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Sugar: Mix signals

Since the beginning of the year the commodity lost more than 1.0%, but last week rallied more than 3.0% in addition mange to change from a warning to a bullish phase.

Last week the sugar initially fell but found enough buying pressure to trim all its losses and closed near the high of the week, in addition managed to close above the previous week high, suggesting a strong bullish momentum.

On one hand we have bullish engulfing, suggesting the continuation of the upward move, however on the other hand we have a bearish divergence that may cut the legs of the potential upward move.

Stochastic is showing bearish momentum although is still above the 50 mid line.

Expecting an upward move to 2015 high at 16.13 on a break above the previous week high at 15.09 (scenario 1) but a break below the previous week open at 14.50 may trigger a downward move to other weekly support at 13.80 (scenario 2).