Technical Update - Wheat broken key support turning bearish, but indicates higher prices longer term
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
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.
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.
Latest Market Insights
Quarterly Outlook Q3 2022: The Runaway Train
- Central banks' attempts to kill inflation is a paradigm shift, which could end in a deep recession.
Tangible assets and profitable growth are the winnersWith US equities officially in a bear market, the big question is where and when is the bottom in the current drawdown?
Understanding the lack of investment appetite among oil majorsThe everything rally seen in recent quarters has become more uneven, as its strength is driven by commodities in short supply.
The pressure is on as the wind leaves the sailsWith cryptocurrencies in sharp decline, are we entering a crypto winter or is the bear market a healthy clean-up of the crypto space?
Why the Fed can never catch up and what turns the US dollar lower?Many other central banks are set to eventually outpace the Fed in hiking rates, taking their real interest rates to levels higher than the Fed will achieve.
Bank of Japan: Swimming against the tideThe Japanese economy has gone from the age of deflation to rapidly rising prices in no time, leaving the Bank of Japan in a pickle.
Green transformation detour and bear market hibernationWith the impending risk of global econonomic derailment, we share the five things investors need to consider in this new half year.
Crisis redux for the eurozone?Whether there's going to be a recession in Europe or not, the path towards a stable economy will be agonizing.
Technical Outlook: Gold, Oil and a remarkable multi-decade perspective on EquitiesThe Nasdaq bubble pattern, USDJPY resistance, crude oil uptrend losing steam and the technical outlook for USD.
China: the train of new development paradigm left the station two years agoChina is transiting to a new development paradigm, as they are hit by deteriorating terms of trade, a slower global economy and an uncertain future while continuing attempts to contain the pandemic.