The break signals a reversal of the uptrend from $4.18-1/2, unless wheat could climb above $5.25-3/4 without falling first. After piercing below $5.18-1/2, the contract is more likely to fall to $5.11, the 61.8% retracement on the uptrend from $4.87-3/4 to $5.49-1/4.
A break above $5.25-3/4 could lead to a gain to $5.34-1/2. On the daily chart, wheat has pierced twice a support at $5.18-3/4, the 50% retracement on the downtrend from $6.19 to $4.18-1/2. Chances are it may break this level and fall towards $4.95.
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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. **