SINGAPORE: The CBOT soybean July contract may retrace moderately to a support at $13.27 per bushel, before retesting a resistance at $13.44-3/4. The subsequent move is expected to be somehow mirroring the slow rise from the May 18 low of $13.23-1/4.
The possible three-wave structure of the bounce from the Monday low of $13.04-3/4 also makes such a move more likely. A break below $13.27 may trigger a fall to $13.13-1/2. But this deep fall may not alter the structure of the bounce, like reducing the three waves to only one.
The wave c is still likely to unfold.
A fall below $13.05-1/4 would confirm a continuation of the downtrend, while a break above $13.44-3/4 could lead to a gain to $13.56-1/4.
On the daily chart, a bullish engulfing pattern formed between May 19 and Monday, which suggests a reversal of the downtrend from the May 8 high of $14.46-3/4 and a further gain towards $13.64-1/2.
CBOT soybeans may bounce into $13.48-3/4 to $13.56 range
A break above $13.44-1/2 would confirm the target of $13.64-1/2.
A drop below $13.20 may violate the bullish engulfing pattern. All the bullish targets have to be aborted accordingly.
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