SINGAPORE: CBOT September wheat may retest a resistance at $5.08-3/4 per bushel, a break above which could lead to a gain to $5.17-1/2.
Wheat is quite persistent in testing a falling trendline. Even though it failed twice, its persistence does suggest a reversal of the downtrend from the June 27 high of $5.57-1/4.
So long as the contract stays above a support at $4.94-3/4, it is highly likely to break $5.08-3/4, the 38.2 projection level of a downward wave c from $5.31-1/2.
A break below $4.94-3/4 could cause a loss into the range of $4.72-1/4 to $4.86. On the daily chart, wheat is stuck in a neutral range of $4.92-1/4 to $5.07-1/2, formed by the 50% and the 38.2% retracements on the uptrend from $4.27-1/4 to $5.57-1/4.
Most likely it could break above $5.07-1/2 and rise towards $5.26-1/2.
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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. **