SINGAPORE: CBOT wheat may stabilise around a support zone of $8.46-1/2 to $8.52-3/4 per bushel and bounce towards $8.63.
The zone is formed by the 50% retracement of the uptrend from $7.43-1/4 and the 61.8% projection level of a downtrend from $9.06-1/4.
Each of these supports is strong enough to temporarily stop the fall and cause a bounce.
When working together, they become stronger.
A break below $8.46-1/2, however, could open the way towards $8.22 to $8.40 range. On the daily chart, wheat broke a support at $8.70-1/4.
The break opened the way towards $8.21-3/4, which is also suggested by the lower channel.
China sold 41,359 tonnes of wheat at reserve auction
The anticipated stabilisation and bounce on the hourly chart will not have any substantial impact on the target of $8.21-3/4.
Only a close above $8.70-1/4 could make this target invalid.
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