Thursday, 26 March 2015 10:40
SINGAPORE: CBOT wheat may rise to $ 6.24-1/2 per bushel over the next three months, as indicated by its wave pattern and a Fibonacci retracement analysis.
The contract has been consolidating in a range of $ 4.85 to $ 6.47-1/4, formed by the 76.4 percent and the 61.8 percent Fibonacci retracements on the rise from the December 1999 low of $ 2.22-1/2 to the February 2008 high of $ 13.34-1/2.
The consolidation may continue as wheat failed to break past $ 4.85 again. Three waves may make up the consolidation, with the current wave c unfolding towards $ 6.24-1/2, the 61.8 percent Fibonacci retracement on the rise from the Sept. 11, 2009 low of $ 4.25-1/4 to the July 23, 2012 high of $ 9.47-1/4.
Strategically, the target at $ 6.24-1/2 could be confirmed when wheat climbs above the nearest resistance at $ 5.48-1/2, the 76.4 percent retracement.
It might not be incorrect to assume that wheat is still confined within the two trendlines of a triangle.
After its failure to break the lower trendline, wheat has been bouncing towards the upper trendline, which is around $ 6.64, the 38.2 percent Fibonacci projection level of a presumed wave C that started at the Sept. 25, 2014 low of $ 4.66-1/4.
A break below the pivotal support at $ 4.85 could lead to a further loss to $ 4.25.
Copyright Reuters, 2015
