Technical Technical Technical

Technical Update - Wheat broken key support turning bearish, but indicates higher prices longer term

Commodities 3 minutes to read
KCL
Kim Cramer Larsson

Technical Analyst, Saxo Bank

Summary:  Wheat price closed below key support confirming bear trend,. But the longer term picture suggests higher prices


Wheat closed Thursday below key support at 972 in continued heavy selling further confirming the down trend. RSI on daily is below 40 with no divergence support the view of further downside.
A downtrend that has the potential to reach the 0.764 retracement of the buying panic caused the start of the Ukraine war. The daily 200 SMA and the medium-term rising trend line will offer support

If Wheat price crawls back above 972 it is back to neutral.

Wheat D 24 jun
Source: Saxo Group

Weekly more clearly shows the rising trend line with the 55 weekly SMA almost glued to it.
RSI is still bullish with no divergence. If Wheat price drops to support 0.764 retracement and rising trend line support around 900-885 RSI might still stay above 40 threshold. A bounce from that support is plausible.

Wheat weekly 24 jun
Source: Saxo Group

Monthly chart shows a bag of mixed signals. The current price level seems to be important to observe. Wheat was rejected at this level back in 2012Paused a bit in February this year before breaking above with a bang but is now flirting with it once again. A Monthly close below could indicate further downside. Expect a tug of war around current price levels. 
However, RSI still bullish with no divergence indicating higher price levels could be expected longer term.
The month of June is not yet over but up until now it has formed a likely Bearish Engulfing candle which is a strong top and reversal indicator.  
However, RSI still bullish with no divergence indicating higher price levels could be expected longer term. And if the Wheat closes back above 972 the uptrend could resume. 

Wheat M 24 jun
Source: Saxo Group

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