SINGAPORE: CBOT July wheat may test a resistance at $5.18-3/4 per bushel, a break above which could lead to a gain to $5.42-1/4.
The resistance is identified as the 50% retracement of the downtrend from $6.19 to $4.18-1/2. Wheat not only cleared a barrier at $4.95 but also broken a trendline falling from $6.19. Its strong surge confirms a reversal of the downtrend from $6.19.
The trend consists of three waves. The second wave labelled B peaked around $5.42-1/4. It seems wheat is heading towards this level.
On the hourly chart, wheat is riding on a wave C, which is expected to travel to $5.40-1/2, its 100% projection level. A realistic target will be $5.22-3/4. A correction may be limited to $4.94-1/2.
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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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