CBOT September wheat may break a support at $5.31-1/2 per bushel and fall more to the next support at $5.25-1/2, as suggested by its wave pattern and a Fibonacci ratio analysis. The support is provided by the 223.6 percent Fibonacci projection level of an upward wave C, which is the third wave of a three-wave cycle from $4.30-3/4. This wave could have completed, as indicated by the duration and the depth of the fall from the July 5 high of $5.74-1/2.
The fall consists of three waves. The third wave, labelled c, is capable of travelling to $5.25-1/2, its 100 percent Fibonacci projection level. Once wheat drops to $5.25-1/2, a head-and-shoulders pattern will be confirmed, which suggests a highly bearish target. Resistance is at $5.38, a break above which could lead to a gain into the range of $5.43 to $5.48.
Use EIKON news "Alerts" to get reports sent to your email box automatically. 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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