CBOT wheat to hover above $5.26-1/2

26 Jan, 2015

SINGAPORE: CBOT March wheat failed to break a support at $5.26-1/2 per bushel and may hover above this level or revisit its Jan. 21 high of $5.44-1/2.

The support is provided by the 76.4 percent Fibonacci retracement on the uptrend from the Sept. 25, 2014 low of $4.80 to the Dec. 18, 2014 high $6.77. It is stronger than expected, as it still holds after being tested twice.

Wave pattern indicates wheat is riding on a wav iv, which started at the Jan. 20 low of $5.23. Given that the preceding wave ii is sharp, the wave iv could be sideways.

A drop to $5.23 may confirm a break below $5.26-1/2, as well as the target at 5.06-3/4, the 86.4 percent level.

Copyright Reuters, 2015

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