In 2014 July coffee (KC) futures traded as low as 129.65 and as high as 232 as Ebola fears caused spikes in a number of commodities. Falling off that 2014 high, in 2015 coffee is heading for a test of that 2014 low (For additional reading, see Top Factors that Move the Price of Coffee).
Strong selling in January and late February has kept the trend down, with the price stabilizing (moving sideways) since March. The low of this sideways consolidation was 132, but on May 4 the price edged below that to 131.55. The new lower swing low, and series of lower swing highs since early April indicate selling pressure may be building in this channel.
With the longer-term trend down, if this sideways channel breaks the initial target is 116 (based on approximate high of current range, subtracted from breakout price).
The very large topping pattern which occurred in 2014 provides an additional target at 110.
Figure 1. July Coffee Futures - Daily Chart
If the support region near 132 holds, or the price breaks lower but then quickly rallies (false breakout), pay attention to 144. If the price moves above that it will create a short-term higher high (still within the range) and is the first indication of a potential bullish move. Like trading a triangle breakout, a trade could be taken near 144, with a target of 160. That would mean a breakout above 150, giving another target, based on the range, of 167.
167 is right below a key support area from 2014, which could now provide resistance.