The chart below shows coffee's monthly spot price in the futures market. You can see it had a strong run higher from 2002 to its peak in 2011. A steady trend down retracing 78.6% of that move followed for the next 3 years. It was quickly bought up and held at a 50% retracement of that move with a short, inter-month spike to 61.8%. Since that 2014 high, coffee has been falling.
The start of the year saw the price touch an 88.6% retracement of the shorter spike and then support. Which brings us to May 2016. The price now looks to be breaking the range to the upside. And it has support from other indicators to do so. The RSI at the top of the chart is turning back up. It too made a higher low, just like the price. And the MACD is about to cross up. This is a bullish buy signal that is happening at a higher low.
How high will it go? The nested Fibonacci retracement levels are getting a bit thick, so I've left the current range off. But a 50% retracement -- like the last spike -- would look for a move to 1.69. That's 27% higher than it is right now. If it goes to 61.8% then the price would be 1.83 and 78.6% and, like the first retracement, it would move to 2.02. Now, how do you like your coffee?