SINGAPORE: CBOT wheat may stabilize around a support at $7.65-1/2 per bushel, following its failure to break this level on Wednesday.
The contract is riding on a wave (b), the second wave of a three-wave cycle from the July 22 low of $7.54.
This wave is expected to end above $7.54, the starting point of the wave (a).
A break below $7.65-1/2 may open the way towards $7.36-1/2 to $7.54 range, while a break above $7.92-1/2 may lead to a gain to $8.24.
On the daily chart, even though wheat is approaching $7.54 again, it is unlikely to revisit this level, as suggested by the bullish divergence on the RSI.
Wheat at 1-week low
This divergence appeared after a five-wave cycle from $12.85.
It is a reliable signal of a further gain.
The rise from $7.54 simply looks too brief to complete. Chart pattern indicates the formation of a small double-bottom or high-low bottom.