SINGAPORE: CBOT July corn may test a resistance at $3.70-3/4 per bushel, a break above which could lead to a gain into the range of $3.73 to $3.75-1/4.
The resistance is provided by the 50 percent retracement on the downtrend from $3.90 to $3.51-1/2. The contract has cleared a lower resistance at $3.66, the 38.2 percent level. It is expected to approach $3.70-3/4.
Wave pattern suggests the progress of an upward wave c from $3.58-1/2. A projection analysis on the target of this wave reveals an immediate resistance at $3.69-1/2, the 76.4 percent level, which temporarily stops corn from rising. However, this wave may not complete until it reaches $3.73.
It seems the current bullish momentum is pretty strong, as a result, the resistance at $3.69-1/2 may not trigger a deep correction. Most likely, corn may hover below this barrier for a while before rising again.
A break below $3.66 could cause a loss limited to $3.64, as suggested by a rising trendline. On the daily chart, corn has broken resistance at $3.68-1/2, the 86.4 percent projection level of a downward wave C from $4.03-1/4. It is expected to test the next resistance at $3.72-1/2.
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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. **
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