CBOT wheat may seek support in $5.60-1/2 to $5.89-1/2 zone in Q2

SINGAPORE: CBOT wheat may seek a support in a zone of $5.60-1/2 to $5.89-1/2 per bushel next quarter, before resuming its uptrend from $3.59-1/2.

The uptrend may at least extend to $7.31-3/4, the 38.2% retracement of the downtrend from $13.34-1/2 to $3.59-1/2. An aggressive target range is from $8.47 to $9.62, which engulfs the peak of the wave B at $9.47-1/4.

The trend seems to be zigzagging up, confined within a rising channel. The lower channel line indicates a completion of the current fall around $5.60-1/2, or $5.89-1/2, if it is very shallow.

Wave pattern suggests the progress of a wave C, which has briefly travelled above its 114.6% projection level of $6.83-3/4. It has a better chance of extending into the range of $7.38-3/4 to $7.94.

A break above $6.49-3/4 may indicate a resumption of the wave C towards $7.31-3/4. However, confirmation of the resumption will be when wheat rises above $6.83-3/4.

On the daily chart, a five-wave cycle from the June 26, 2020 low of $4.68 has completed. However, the drop observes closely a set of retracements on the uptrend from $4.16 to $6.93. The support at $6.28 is broken.

The break opened the way towards $5.87-1/4.

The pattern between Jan. 15 and March 18 could be roughly regarded as a double-top, which suggests a target around $5.54-1/4, close to the bottom of the wave 4.

This target will be confirmed when wheat breaks $5.87-1/4.

A rise above $6.27-1/2 may be extended to $6.52-1/2.

Only a break above $6.73-1/2 could signal the continuation of the uptrend.

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