The resistance is identified as the 61.8% retracement on the downtrend from $6.19 to $4.18-1/2. The short uptrend from the June 10 low of $4.93-1/4 has not been disrupted by a correction. Such a correction has been triggered by the $5.42-1/4 level.
It is not very clear how deep the correction will be. The 50% level at $5.18-3/4 looks like a proper target. On the hourly chart, wheat has found a temporary support at $5.29-3/4, the 38.2% projection level of an upward wave C from $4.87-3/4.
So long as the contract stays below a resistance at $5.43, it is likely to break the support and fall towards $5.20, a lower support established by a rising trendline.
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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. **