CBOT wheat may stabilise around $5.87-1/4 and bounce
CBOT September wheat WU3 may stabilise around a support of $5.87-1/4 per bushel, and bounce again towards a resistance zone of $6.12-3/4 to $6.19-1/2.
The downtrend from $7.40 looks exhausted, as confirmed by the bullish divergence on the hourly RSI. A consolidation or a decent bounce is due.
The support of $5.87-1/4 is strengthened by a similar one of $5.88. Together, these supports formed a zone that is likely to cause a bounce.
A break below $5.88 may open the way towards $5.77-1/4. On the daily chart, a strong support at $5.91 may work again to trigger a bounce, which could be much weaker than the one from the May 31 low of $5.87-3/4.
The doji on Wednesday sent the very first signal of the second bounce. Wheat has to close above $5.91 on Thursday, to nurture the bounce. A failure may be followed by a drop into $5.39-1/2 to $5.66-1/4 range.
** 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 their own professional or other advisers for business, financial or legal advice regarding the products mentioned in the analyses.
Source: Reuters (Reporting by Wang Tao; Editing by Rashmi Aich)
