SINGAPORE: CBOT September wheat is expected to test a resistance at $4.94-3/4 per bushel, a break above which could lead to a gain to $5.01-3/4.
The bounce from the Aug. 1 low of $4.71-3/4 is extending. It consists of three waves. The third wave labelled c is unfolding towards the range of $4.94-3/4 to $5.01-3/4, formed by the 61.8pc and the 50pc projection levels of a downward wave (c) from $5.31-1/2.
This wave is a part of a zigzag from the June 27 high of $5.57-1/4, which may have ended around $4.72-1/4.
Even though it is too early to conclude that the downtrend from this high has reversed, a further bounce could be highly likely.
Key support is at $4.80-1/4, a break below which would signal the continuation of the downtrend towards the range of $4.63-1/2 to $4.72-1/4.
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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.