Technical Update - After massive sell offs in Grains it could be rebound time
Kim Cramer Larsson
Technical Analyst, Saxo Bank Group
Summary: Wheat, Soybeans and Corn have been hit with massive selling the past week. All back to pre-Ukraine war levels. Oversold indicator suggest we could see a nice rebound. But selling pressure can quickly resume
Wheat is back to pre-Ukraine war level. All support levels have been taken out and Wheat is now hovering around 820 which was top of the range area it was trading a couple of months prior to the war.
Wheat can still drop further as there is no support before around 740. However, Wheat is oversold and RSI has not seen values this low since 2019. RSI has formed a falling wedge like pattern and if it breaks bullish out of this we could see a strong rebound to around 900-926.
Soybeans collapsed after the key support at 1,579 was broke last week. The price has almost moved the same length as the range Soybeans was trading March to June. Illustrated by the two arrows.
It seems to bounce from the upper support in the consolidation area 1,429-1,349. A bounce that could take Soybeans up to 200 Simple Moving Average around 1,485, possibly up to the 0.382 Fibonacci retracement at around 1,522
RSI is bearish and despite being oversold Soybeans can drop further. If it takes out yesterdays low we could see Soybeans below 1,400.
Corn has collapsed down to the January lows around 585. RSI showing massive oversold and a rebound is likely. A rebound that could take Corn to around the 0.382 Fibonacci retracement and around the 200 SMA. However, if Corn is being pushed below 580 we could see it drop to around 550.
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.
Please read our disclaimers:
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
- Full disclaimer (https://www.home.saxo/en-gb/legal/disclaimer/saxo-disclaimer)