SINGAPORE: CBOT July wheat may test a resistance at $5.42-1/4 per bushel, a break above which could open the way towards $5.71-1/2.
The resistance is identified as the 61.8% retracement on the fall from $6.19 to $4.18-1/2.
After a consolidation in the range of $4.95 to $5.18-3/4, the contract may have accumulated enough bullish momentum to overcome this barrier.
However, a closer look at the hourly chart reveals an immediate resistance at $5.29-3/4, the 38.2% projection level of an upward wave C from $4.87-3/4.
Strengthening this resistance is another one at $5.29, the June 4 high.
It is not very clear if the contract could overcome these barrier in its current attempt.
The longer it hovers around this level, the more likely it will start a shallow correction.
A rise to $5.32 may confirm a break.
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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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