SINGAPORE: CBOT July wheat may edge up to a resistance at $5.43 per bushel and temporarily peak around this level.
The resistance is identified as the 50pc projection level of an upward wave C from $4.87-3/4.
From the June 10 low of $4.93-1/4, this wave has not been disrupted by any descent correction yet.
The bearish divergence on the hourly RSI suggests such a correction may occur around $5.43.
A retracement analysis on the daily chart provides a more convincing signal that a deep correction is due.
The analysis reveals a key resistance at $5.42-1/4, the 61.8pc level, which almost coincides with $5.43.
The 50pc level at $5.18-3/4 caused a sharp fall.
There is a good reason to believe that the next resistance at $5.42-1/2 would trigger another drop.
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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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