SINGAPORE: CBOT July wheat may break a support at $4.65-3/4 per bushel and fall more towards the next support at $4.47-3/4.
These supports is identified as the 23.6% and the 14.6% retracements of the downtrend from $6.19 to $4.18-1/2. Wheat failed to break the resistance at $4.95 and a trendline falling from $6.19.
The failure suggests the downtrend remains steady. To put it another way, the bounce from $4.18-1/2 is over, and wheat may revisit this level.
On the hourly chart, wheat has broken a support at $4.69, the 50% projection level of an upward wave C from $4.46-1/4. The next support will be at $4.63-1/2. The wave B ended around $4.46-1/4, which is likely to be visited again.
The current fall is driven by a wave c, which is capable of traveling to $4.61-1/4, its 100% projection level. Once wheat falls to this level, a break below the support at $4.65-3/4 on the daily chart will be confirmed.
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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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