Robusta May Extend Advance to $1,360 a Ton: Technical Analysis

Robusta coffee, now at a two-month high in London, may “soon” climb as high as $1,360 a metric ton, according to technical analysis by Newedge Group.

The attached chart shows the beans are approaching a 61.8 percent retracement of their decline in the past two months, one of the levels singled out in so-called Fibonacci analysis. Prices yesterday jumped 4.3 percent, the most in three months, to $1,342 a ton.

“Remaining above $1,318 would suggest a test of $1,358- $1,360 soon,”Veronique Lashinski, a technical analyst at Newedge in Chicago, said by e-mail after trading closed yesterday. “After that, we’d be looking at a rise to $1,380- $1,382.”

Robusta is up 3.7 percent this year after declining 16 percent in 2009. The beans, used in instant coffee and blends, are grown mostly in Vietnam and Brazil.

In technical analysis, investors and analysts study charts of trading patterns and prices to predict changes in a security, commodity, currency or index. Fibonacci analysis is based on the theory that prices rise or fall by certain percentages after reaching a high or low.

Bloomberg

Tags: Vietnam coffee prices, Vietnam Robusta Coffee