SINGAPORE: CBOT July wheat may consolidate in a narrow range of $4.47-3/4 to $4.65-3/4 per bushel for one or two days before resuming its rally.
The range is formed by the 14.6% and the 23.6% retracements of the downtrend from $6.19 to $4.18-1/2. With a shooting star forming on Wednesday, the bounce from $4.18-1/2 is discovered to be against the trend from $6.19.
This discovery plays an important part in prediction. It suggests that eventually, wheat could overcome the barrier at $4.65-3/4 and rise into the range of $4.95 to $5.18-3/4. The first round of rally ends around $4.65-3/4.
A detailed study on hourly wave pattern reveals a corrective wave cycle developing from $4.64. Three waves make up the cycle. Unfortunately, there is no clue of the ending point of the current wave b. The only clear part is this wave may be limited to $4.64, to be totally or partially reversed by the third wave labeled c.
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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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