SINGAPORE: CBOT March wheat is expected to retest a support at $5.12-3/4 per bushel, a break below which could cause a loss towards the next support at $5.10.
These supports are identified respectively as the 50 percent and the 61.8 percent retracements of the uptrend from $5.01-1/4 to $5.24-1/2. Given that the uptrend reversed 61.8 percent of the preceding downtrend from $5.38-1/2, this 0.618 ratio may apply to the current drop which could extend to $5.10.
On the daily chart, wheat failed to break a resistance at $5.23, the 61.8 percent projection level of an upward wave C from $5.01-1/4. The resistance is strengthened by another similar one established by a falling trendline. The contract may retrace a bit lower to accumulate strength for retesting the resistance.
* 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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