The contract is riding on a wave C from $4.66-1/4, which is capable of travelling to $5.40-1/2, its 100pc projection level. This wave consists of three smaller waves.
The third wave labelled c is unfolding.
Strategically, the target at $5.40-1/2 will be confirmed when wheat breaks the resistance at $5.24-1/4, the 76.4pc projection level of the wave c.
Support is at $5.16-1/4, a break below which could cause a loss into the range of $5.03 to $5.09-3/4. On the daily chart, wheat has cleared a resistance at $5.18-3/4, the 50pc retracement on the fall from $6.19 to $4.18-1/2.
It may rise to $5.42-1/4.
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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.
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