TECHNICALS-NY coffee may fall further to $2.5415 in Q3

SINGAPORE, June 26 (Reuters) - New York coffee KCc2 may fall further to $2.5415 per lb in the third quarter, as suggested by its wave pattern and a retracement analysis.

A big wave (C) from $1.45 has completed around resistance at $4.2465, its 161.8% projection level, as confirmed by the deep fall from the February high of $4.2995.

Five small waves make up the wave (C), with the fifth wave, the wave (5) further consisting of five smaller waves. The current correction has extended beyond the wave iv territory between $3.14 and $3.4835.

The correction may eventually develop to the bottom of the wave ii around $2.4080. In terms of duration, the correction is likely to last another few months, because it could be the same degree as the one from the February 2022 high of $2.6045.

So far, the fall has been closely observing a series of retracements on the uptrend from $1.4550 to $4.2995. After falling below the 38.2% level of $3.2030, the contract is expected to extend loss into $2.5415 to $2.8775 range.

On the daily chart, the first round of the correction from $4.2995 to $3.2390 consists of the three small waves. The wave c is roughly 1.5 times the length of the wave a.

Such a ratio is expected to govern the length of the big wave C from $4.1890, which could travel to $2.5980, close to the bottom of the wave ii at $2.4080.

Immediate resistance is at $3.1105, a break above which may lead to a gain to $3.3910.

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** Wang Tao is a Reuters market analyst for commodities and energy technicals. The views expressed are his own.

** No information in this analysis should be considered as being business, financial or legal advice. Each reader should consult his or her own professional or other advisers for business, financial or legal advice regarding the products mentioned in the analyses.