SINGAPORE: New York July cocoa is biased to break a support at $2,415 per tonne and fall towards the next support at $2,379, following its failure to break a resistance at $2,460.
The resistance is identified as the 76.4pc projection level of an upward wave C from $2,226.
This wave could be broken down into five smaller waves.
Such a structure indicates a completion of the wave C or a deep correction.
On the daily chart, cocoa is struggling around a resistance at $2,434, the 50pc retracement of the downtrend from $2,825 to $2,043. This resistance triggered a pullback towards a falling trendline.
A break above $2,460 (first chart) could signal the continuation of the wave C towards $2,532.
Note: Cocoa report is published twice a week, Wednesday and Friday.
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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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